Storage leader EMC Corp. will sell a $218.5 million piece of its virtualization software subsidiary VMware to Intel Capital, the investment arm of the giant chipmaker, the companies announced yesterday. The news came in the midst of EMC’s bigger move to sell about 10 percent of VMware to the public in an offering expected to come later this summer. All told, the public sale could bring in between $740 million and $950 million, depending on the price point and how many shares are ultimately offered.
VMware, which EMC purchased three years ago for $625 million, has proved an astute acquisition for the Hopkington-based EMC. There’s a nice write-up in today’s Boston Globe by Hiawatha Bray. The company’s virtualization software essentially creates many virtual machines on one individual physical computer, providing a substantial increase in the number of tasks that can be handled by the computer. Microsoft has identified VMware as an up-and-coming competitor—and you’ll find a bit more on that angle in today’s Wall Street Journal, although a site password is required.
EMC announced last February that it would sell between 33 million and 37,950,000 shares of VMware on the public market at between $23 and $25 per share, cashing in on its subsidiary’s substantial run-up in value since the acquisition. Yesterday’s announcement indicated that after the public sale, Intel would own roughly 2.5 percent of VMware’s common stock. It would also get a seat on the VMware board.
Author: Robert Buderi
Bob is Xconomy's founder and chairman. He is one of the country's foremost journalists covering business and technology. As a noted author and magazine editor, he is a sought-after commentator on innovation and global competitiveness. Before taking his most recent position as a research fellow in MIT's Center for International Studies, Bob served as Editor in Chief of MIT's Technology Review, then a 10-times-a-year publication with a circulation of 315,000. Bob led the magazine to numerous editorial and design awards and oversaw its expansion into three foreign editions, electronic newsletters, and highly successful conferences. As BusinessWeek's technology editor, he shared in the 1992 National Magazine Award for The Quality Imperative.
Bob is the author of four books about technology and innovation. Naval Innovation for the 21st Century (2013) is a post-Cold War account of the Office of Naval Research. Guanxi (2006) focuses on Microsoft's Beijing research lab as a metaphor for global competitiveness. Engines of Tomorrow (2000) describes the evolution of corporate research. The Invention That Changed the World (1996) covered a secret lab at MIT during WWII. Bob served on the Council on Competitiveness-sponsored National Innovation Initiative and is an advisor to the Draper Prize Nominating Committee. He has been a regular guest of CNBC's Strategy Session and has spoken about innovation at many venues, including the Business Council, Amazon, eBay, Google, IBM, and Microsoft.
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