VMware to Acquire Privately Held SpringSource for $420M

Virtualization-software firm VMware (NYSE:VMW), today announced its imminent acquisition of privately held SpringSource — a company that makes “lean software”, a concept that is being rapidly adopted by enterprises focused on cutting cost while increasing productivity — for a total value of $420 million. VMware, which is majority-owned by EMC Corporation (NYSE:EMC), will pay $362 million in cash and equity plus the assumption of approximately $58 million of unvested stock and options. Both companies said in a statement they plan to deliver new solutions that enable them to more efficiently build and manage applications within both internal and external cloud architectures.

The acquisition, which has been approved by SpringSource’s stockholders, is expected to close in the third quarter, subject to customary closing conditions.

“Today’s modern computing environments are moving to an application and data-centric world powered by state of the art virtualized and cloud computing platforms,” said Paul Maritz, president and chief executive officer, VMware. “The combination of SpringSource and VMware capitalizes on this shift and places us right at the intersection of the most important forces in the software market today — virtualization, modern application frameworks and cloud computing.”

Together, VMware and SpringSource plan to further develop integrated Platform as a Service [PaaS] solutions that can be hosted at customer datacenters or at cloud service providers. According to Forrester Research, the rapidly growing PaaS market is expected to grow to $15 billion by 2016.

VMW shares fell 15 cents, or (-0.47%) Monday in AH trading to $31.85. The stock has regained about a third of its value this year.

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