VMware buys AirWatch for $1bn in mobile security push

Virtualisation giant's news comes as it prepares for like-for-like sales hike in its Q4 results

VMware has splurged $1.18bn (£701m) on mobile management and security firm AirWatch in an effort to boost its end-user computing (EUC) business.

Atlanta-based AirWatch provides mobile management tech to its 10,000 global customers. It employs 1,600 staff across nine global offices, including its European headquarters in Milton Keynes.

VMware paid $1.175bn in cash for the firm as well as $365m of instalment payments and equity. The transaction was funded through a combination of balance sheet cash and proceeds from approximately $1bn of extra debt provided by its parent firm EMC.

The move is the second major acquisition VMware has made in the last few months: at its VMworld Europe event in October, it announced its acquisition of desktop-as-a-service player Deskton, also aimed at enhacing its EUC arm.

The AirWatch team will continue to report to the firm's founder John Marchall as part of its new owner's EUC business, led by general manager Sanjay Poonen. Airwatch co-founder Alan Dabbiere will report in to VMware boss Pat Gelsinger in his role overseeing a new operating board.

Gelsinger said the new buy will help "turbo-charge" customers' technology.

"With this acquisition, VMware will add a foundational element to our end-user computing portfolio that will enable our customers to turbo-charge their mobile workforce without compromising security," he said.

VMware announced the news at the same time as releasing its preliminary financial results for the fourth quarter in which it claims like-for-like sales rocketed 15 per cent to $1.48bn.

The AirWatch acquisition is due to close during the first quarter, subject to customary closing terms and regulatory approvals.