EMC's VMware IPO Date & Terms (EMC, VMW, INTC, CSCO)

The upcoming partial IPO of VMware (NYSE:VMW) from EMC Corp. (NYSE:EMC) has been one of great interest, which almost goes without saying.  Terms are now set and the IPO roadshow has begun.  As previously noted, this one has garnered investment from Intel (NASDAQ:INTC) last month, and more recently has garnered an investment from Cisco Systems (NASDAQ:CSCO) on July 27.  We have also noted where Intel and others also have an investment in a relatively free competitor named VirtualIron ("virtual-iron").

The final pre-IPO range is for 33 million shares of class A common stock at an expected price range of $23.00 to $25.00.   That price can change ahead of the IPO and is not set in stone.  Book runners are Citigroup, J.P.Morgan, and Lehman; co-managers are listed as Credit Suisse, Merrill Lynch, and Deutsche Bank.  After the offering EMC will own 26.5 million shares of Class A common stock but will own all 300 million shares of the Class B common stock, representing approximately 87% of the outstanding shares.  The rights of A & B shares are identical, except when it comes to who gets the final say: Class B shares have 10 votes, or then-times the 1 vote per share of class A common stock.

The prospectus is also out, and what is expected is that the partial IPO spin-off by EMC Corp (NYSE:EMC) will price on or around August 13, 2007 and trading will begin the following day. We had an assumed first full week in August earlier in July, so these dates are pretty close. The roadshow from Diane Greene, President & CEO, of VMware can be seen at the link here.

We’ll be sending out a full report to subscribers a day or two out from the formal IPO launch.  As a reminder, this is really being only partially spun-off by EMC and is in a sense no different than a tracking stock that will give an implied value monetization to the unit.  This will be a controlled entity and EMC shareholders as of now will not receive any shares of VMware from EMC.  That may change down the road of course, although no such indications have been telegraphed.

We’ll probably be following up with a couple more notes if any developments or changes occur between now and the IPO launch.

Jon C. Ogg
August 1, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.