UPDATED 3.10PM GMT: Fast-rising enterprise mobility vendor AirWatch is to be snapped up by cloud software giant VMware for US$1.54 billion.
Privately held and headquartered in Atlanta, AirWatch claims more than 10,000 enterprise customers globally and more than 1,600 employees across nine offices. The Atlanta site is expected to expand and be the center of VMware’s mobile operations.
AirWatch raised a US$200 million Series-A funding round last year from Insight Venture Partners and Accel Partners and turned heads at last year’s Mobile World Congress with one of the event’s largest exhibitor stands. It touts itself as “the world’s largest mobile security and enterprise mobility management provider.”
The AirWatch team will continue to report to founder and chief executive officer John Marshall as part of VMware’s End-User Computing group, led by Sanjay Poonen, EVP and GM. Alan Dabbiere, AirWatch’s co-founder and chairman, will be overseeing a new AirWatch operating board which will report to Pat Gelsinger, VMware’s chief executive officer.
The acquisition – made up of US$1.175 billion in cash and US$365 million of installment payments and assumed unvested equity – is expected to close by the end of this current quarter, subject to regulatory approvals.
The price tag caught the attention of analysts. “This is a very high valuation for a company of AirWatch’s size, but given the massive valuations of companies being acquired these days, not particularly unusual,” noted Jack E. Gold of J.Gold Associates.
VMware’s move will extend its vision of using software to manage the surge of mobile devices in the workplace and will bring fresh competition to the space. “This acquisition is a direct shot across the bow aimed at SAP, IBM, Citrix, Oracle and others that VMWare see as a threat to their mobile cloud and virtualisation ambitions,” commented Gold.