MoFo Advises VMware in Connection With Strategic Recap Transaction

12/28/2018

Brandon C. Parris, Michael G. O'Bryan, and W. Lee Johnston

Corporate and Mergers + Acquisitions

MoFo News Item

Morrison & Foerster was lead counsel to VMware, a leading innovator in enterprise software and a subsidiary of Dell Technologies Inc., in its structuring and negotiations with Dell, the world’s largest private technology company, in connection with Dell’s recap transaction involving the exchange of Dell’s VMware tracking stock for Dell’s Class C common stock and cash, which closed on December 28, 2018. The majority of the funding for the cash portion of the exchange transaction consisted of proceeds from VMware’s US$11 billion pro rata special dividend to all holders of VMware common stock, which was paid by VMware on December 28, 2018, and originally announced on July 2, 2018.

In connection with the transaction, VMware and Dell entered into a governance agreement that provides for a continuation of strong independent governance for VMware and its stockholders, and requires Dell to follow certain covenants in its interactions with VMware going forward.

VMware’s payment of the special dividend, and the elimination of Dell’s VMware tracking stock, ended months of public speculation over the nature of VMware’s relationship with Dell, during which MoFo advised VMware, including in connection with Dell’s evaluation of a potential business combination with VMware.

The MoFo VMware corporate team was led out of San Francisco by corporate partner Brandon Parris, and involves corporate partner Michael O’Bryan and corporate associate Lee Johnston.

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