Intel to Buy Stake in VMware
Intel to Buy Stake in VMware
July 13, 2007: Back in February EMC has announced that it would sell of a 10 percent stake in VMware in a public offer, now it appears that Intel is getting in on the deal with EMC allocating a further 2.5 percent stake to the chip giant in a US$218 (AU$252) million deal.
The IPO is set to net EMC upwards of US$741 (AU$858) million, a substantial return on its original US$625 (AU$724) million investment when it acquired the firm in 2004 – especially considering the company will retain roughly 88 percent of the virtualisation specialist.
33 million shares will be offered to the public at between US$23 and $25 (AU$27-29), with 4,950,000 more to be possibly be added if too many subscriptions are received.
With processor power outstripping use in many cases, virtualisation is snowballing in popularity as enterprises and data centres make their hardware earn its keep in running and cooling costs. By selling off a portion of its interests, EMC can cash in on the booming virtualisation movement while remaining in control of its subsidiary.
The deal with Intel is subject to approval from regulators, and aside from its shiny new stake in the virtualisation firm Intel will also gain a seat on its board of directors.
While it has been announced, no date has been set as yet for VMware’s IPO.
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