VMware splashes out $420 million on SpringSource

 

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By Reuters

Posted on 11 Aug 2009 at 17:35

Business software maker VMware has agreed to buy privately held SpringSource for $420 million, its biggest-ever acquisition.

The acquisition will help VMware beef up its portfolio of programs that help companies run data centres.

Buying SpringSource, which sells software tools that companies use to write in Java, also helps VMware diversify into other areas.

"By some estimates, half of new Java application development work is being done in the Spring environment," claims VMware Chief Executive Paul Maritz.

In the near term, Maritz says VMware will not favour the Spring platform over other platforms. But "in the long run... innovation is most efficiently done when you have both parties sitting in the same tent."

"We wouldn't do this transaction if we didn't fundamentally believe it would fuel growth and our strategic position with customers," adds company spokeswoman Mary Ann Gallo.

VMware will pay $362 million in cash and equity for SpringSource and assume $58 million in unvested stock and options. The company says it expects the deal to close in September and be cash-flow positive in the first half of 2010.