EMC has entered into a definitive agreement to acquire privately-held cloud software vendor Virtustream in an all-cash transaction of US$1.2 billion, with the vendor forming EMC’s new managed cloud services business.
The acquisition represents a ‘transformational element’ of EMC’s strategy to help customers move all applications to cloud-based IT environments, EMC says in a statement.
With the addition of Virtustream, EMC says it now provides the industry’s most comprehensive hybrid cloud portfolio to support all applications, all workloads and all cloud models.
“Virtustream is an exceptional company and this is a critical and transformative acquisition for EMC in one of the industry’s fastest-growing and most important sectors,” says Joe Tucci, chairman and CEO at EMC.
“With Virtustream in place, EMC will be uniquely positioned as a single source for our customers’ entire hybrid cloud infrastructure and services needs. We could not be more delighted that Virtustream will be joining the EMC Federation family. It’s a game changer.”
One of the world’s fastest-rising cloud software and services companies, Virtustream services are utilised by enterprises worldwide to migrate, run and manage mission-critical applications in the cloud, including SAP.
Virtustream customers include marquis enterprises such as The Coca-Cola Company, Domino Sugar, Heinz, Hess Corporation, Kawasaki, Lexmark, Scotts Miracle-Gro and a global footprint of service provider partners who use Virtustream software to power their cloud offerings.
Virtustream’s cloud software and Infrastructure-as-a-Service portfolio will be delivered directly to customers and through partners. EMC Federation service provider partners will receive access to Virtustream’s xStream cloud management software platform and be enabled to adopt and deliver their own branded services based upon it.
“Virtustream has established itself as an industry leader and innovator for running mission-critical enterprise applications in the cloud,” says Rodney Rogers, Virtustream chairman and CEO. “We’re proud to be joining the EMC Federation where our combined capabilities, products and services will allow us to accelerate our vision of delivering the platform of record for enterprise systems, and address the complete breadth of cloud computing needs.”
The transaction is expected to close in the third quarter of 2015, subject to customary closing conditions, and has been approved by the boards of directors of both EMC and Virtustream and the requisite Virtustream stockholders.
The transaction is expected to have no material impact to EMC financial results in 2015 and is expected to be additive to revenues and accretive to EPS in 2016.