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VMware Acquired AirWatch: What the $1.54B Deal Meant

VMware completed its AirWatch acquisition in February 2014. The deal’s headline, closing and SEC purchase-price figures use different measures; the UEM technology is now Omnissa Workspace ONE UEM.
From TheFinanceBase Team2 min to read
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VMware announced its agreement to acquire enterprise mobile-management and security provider AirWatch on January 22, 2014, and completed the acquisition on February 24, 2014. The often-cited $1.54 billion headline is not interchangeable with the cash-and-installment figures in VMware’s announcements or the purchase price later reported in its SEC filing. AirWatch’s unified endpoint-management technology lives on in Omnissa Workspace ONE UEM.

Why did VMware buy AirWatch?

VMware said the acquisition would expand its enterprise mobile-management and security capabilities. Its announcement described a goal of managing users, devices, and applications across desktop and mobile environments. In its FY2014 Form 10-K, VMware summarized the rationale this way: “VMware acquired AirWatch to expand VMware’s solutions within the enterprise mobile management and security space.” That is VMware’s stated purpose, not an independent assessment of the deal’s results.

VMware’s January 22, 2014 announcement said the companies had signed a definitive agreement. The transaction closed on February 24, 2014. At closing, VMware said AirWatch’s team, led by founder and former CEO John Marshall, joined its End-User Computing group. Co-founder and chairman Alan Dabbiere was to oversee a new AirWatch operating board reporting to VMware CEO Pat Gelsinger, according to the closing release.

How much did VMware pay for AirWatch?

The figures differ because they come from different stages of the transaction and describe different measures. The $1.54 billion headline should not be treated as the final cash payment or as the SEC purchase-price accounting figure. VMware’s announcement, closing release, and FY2014 Form 10-K report the following:

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Source and stage Reported amount What the figure describes
VMware announcement, January 22, 2014 Approximately $1.175 billion cash, plus approximately $365 million in installment payments and assumed unvested equity Consideration described when VMware announced the agreement
VMware closing release, February 24, 2014 Approximately $1.181 billion cash, plus approximately $364 million in installment payments and assumed unvested equity Consideration described at closing
VMware FY2014 Form 10-K $1.128 billion total purchase price: $1.104 billion cash and $24 million fair value of assumed unvested equity attributed to pre-combination services Purchase-price accounting reported in the later SEC filing

The filing separately discusses contingent merger consideration related to employment. That accounting treatment is not a reason to add it casually to the reported purchase price. The primary documents cited here do not establish that the $1.54 billion headline uses the same basis as the Form 10-K’s $1.128 billion purchase-price figure.

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What happened to AirWatch?

AirWatch’s product lineage continues as Omnissa Workspace ONE UEM. Omnissa’s Workspace ONE FAQ states: “The unified endpoint management (UEM) technology, Omnissa Workspace ONE UEM, that Workspace ONE is built on, was formerly known as AirWatch.” Omnissa describes Workspace ONE as combining endpoint management with capabilities including adaptive management for bring-your-own-device deployments, digital-workspace security, device-aware access policies, insights, and automation. These are Omnissa’s descriptions of its product.

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The corporate path changed after the original acquisition. Broadcom completed its acquisition of VMware in November 2023, according to Broadcom’s announcement. On July 1, 2024, Omnissa said KKR’s acquisition of the former VMware End-User Computing business was complete and that Omnissa was an independent company, as described in Omnissa’s launch announcement.

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