VMWare’s acquisition of Carbon Black shows how smart additions can propel network firms forward.
Tech company VMware stock was up over 1% in pre-market trading this morning and now stands above $155 in mid-morning trade activity.
That’s close to the stock’s top year-over-year value at $154.98 on September 12, 2018.
Part of the recent spike is an announcement that VMware is buying cloud security firm Carbon Black for $26 per share. VMWare did this through its wholly-owned subsidiary Calistoga Merger Corp.
VMWare: A Company that Helps Clients Thrive in Next-Gen Network Management
The VMware company sells hardware virtualization software, which can be useful for enterprise networks that rely on virtual machine systems to abstract IT architectures. In traditional virtualization, VMs are allocated resources to create an agile, versatile computing network for a number of uses in the industry.
Internal documentation shows that VMWare intends to evolve. That includes:
- Supporting customers in the blockchain world.
- Building and maintaining container networks with Kubernetes infrastructure.
- Participating in complex digital asset schemes or innovating in edge computing — that can change the essential structure of data networks to handle security and other concerns with new internet-of-things network builds.
Carbon Black’s Cybersec Offerings
Carbon Black offers cloud-native endpoint protection in its Predictive Security cloud service.
By investing in this security gear — and purchasing another workload company called Pivotal — VMware could see its utility and its equity soar, some analysts suggest. According to Carbon Black leadership, the move could springboard the firm above contenders like Cisco, a company that’s dominated network markets in the years leading up to today’s vibrant virtualization ecosystem.
Meanwhile, Carbon Black is relatively even over five days at around $26 per share, having plateaued August 23.
It’s also about even year over year, with a $23 value last September and a 52-week low of $11.80.
Reports on the acquisition’s technical data show the cash tender offer is subject to a number of conditions…
First, the purchase will have to clear any applicable regulatory hurdles — that’s no small feat. Then, Carbon Black stockholders will need to tender their shares, and the consensus can have a bearing on feasibility.
There’s also the potential for competing offers and consent risks. Timing delays could unsettle the deal.
Experts also talk about the risks of poor integration or disruption in these types of combinations. That’s where a particular confidence factor can apply, as well as a timeline beyond laying down cash or purchasing a company’s debt.
Some talk about a ‘cultural fit’ that applies to mergers and acquisitions. The suggestion is that this achievement is more complex than it was back in the old days of pre-digital commerce.
And some suggest that partnering with firms may be more productive than acquiring them.
Still, with proper filings and other legwork, the combined power of these two companies is drawing attention. This could change the network industry landscape in the future. In general, leveraging the power of proprietary cybersecurity tools is one way that companies in the tech field stay in business as cyberwarfare and hacking activity proliferate.
Justin Stoltzfus writes for Lancaster Newspapers in Lancaster, PA, as well as numerous digital publications like Answerstock, Techopedia, Warrior Trading, and Breaking Modern. His finance reporting has been featured on Motley Fool, Mint.com, and other sites. Stoltzfus is a graduate of James Madison University in Harrisonburg, VA.