Cisco Systems plans to acquire a 1.6 per centum fairness wager in virtualization software player VMware , mirroring a step Intel took earlier this month .
The investment is part of an upcoming initial public oblation ( IPO ) of 10 percent of VMware ’s ancestry .
Cisco sound out Friday that it plans to buy $ 150 million of VMware Class A common shares , which are own at present by EMC , VMware ’s parent companionship . The move is open to regulatory and other shutting condition . Once the investment has been made , Cisco will own around 1.6 percent of VMware ’s total outstanding coarse stock . According to an update VMware S-1 filing with the U.S. Securities and Exchange Commission , Cisco will buy 6.0 million parcel , valuing each VMware plowshare at $ 25.00 .
VMware is consider whether it will appoint a Cisco administrator to its board of directors .
Cisco hope taking a stake in VMware will help bring two troupe nigher together and result in more users adopt VMware virtualization computer software and Cisco networking products . Cisco and VMware also announced they ’ve agreed to join forces on joint development and selling .
Earlier this calendar month Intel foretell that its venture capital limb , Intel Capital , would invest $ 218.5 million to buy VMware ’s Class A usual stock at a cost of $ 23.00 per part . The investment will give Intel 9.5 million VMware part or around 2.5 percent of the company ’s total common stock . VMware intends to nominate a new appendage to its board from Intel .
EMC denote program to spin off 10 percentage of VMware in February and be after to offer around 33 million portion priced at between $ 23.00 and $ 25.00 per share . The storage vendor carry the IPO to take place during its third fiscal twenty-five percent , which will end Sept. 30 . After the IPO , EMC will bear on to control VMware and own the bulk of the companionship ’s stock . EMC hopes to raise as much as $ 740 million from the public offering .
EMC acquire VMware in January 2004 for $ 625 million and has launch the party as a separate software subordinate head by Diane Greene , VMware ’s former president and CEO .
