VMware buy mobile computing co. AirWatch for about $1.18B in cash plus instalments and equity

Photo: The Canadian Press. All rights reserved.

The Exterior view of VMware headquarters in Palo Alto, Calif., Oct. 24, 2007. THE CANADIAN PRESS/AP, Paul Sakuma

PALO ALTO, Calif. - Cloud computing company VMware says it will pay US$1.18 billion in cash to acquire AirWatch, a mobile technology provider that competes with BlackBerry (TSX:BB) in the corporate sector.

AirWatch has more than 10,000 customers and 1,600 employees around the world and provides a device management service that's promoted as an alternative to BlackBerry products for businesses.

VMware (NYSE:VMW) says the acquisition of Atlanta-based AirWatch will boost its mobile computing offerings for businesses without compromising security.

AirWatch, a privately held company, will continue to be led by its founder and CEO John Marshall and will become part of VMware's end-user computing group.

VMware works with companies to evolve their information technology resources to so-called cloud computing, which generally refers to having IT systems hosted by outside providers.

The deal has been approved by the boards of both companies and the acquisition is expected to close late in the first quarter.