The deal also includes about $365 million in installment payments and assumed unvested equity.
VMware says the acquisition of the privately held AirWatch will boost its mobile computing offerings for businesses without compromising security.
AirWatch will continue to be led by its founder and CEO John Marshall and will become part of VMware’s end-user computing group.
AirWatch has more than 10,000 customers and 1,600 employees around the world. Its headquarters has about 1,000 workers.
The deal has been approved by the boards of both companies and the acquisition is expected to close late in the first quarter.
VMware Inc. shares are up more than 4 percent in pre-market trading on the news.
“AirWatch provides best-in-class, secure, enterprise-mobile management to thousands of businesses around the world,” VMware CEO Pat Gelsinger said in a statement. “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.”
Alan Dabbiere, co-founder and chairman of AirWatch, added, “When we started AirWatch, we set out to help businesses succeed in the mobile explosion that was set to come. Now there are more than 2 billion smart phones and tablets in the world and more than half of those devices touch an enterprise,” “By joining a proven innovator like VMware, we now have an opportunity to bring our leading-edge solutions to an even broader set of customers and partners to help them optimize for the mobile-cloud world.”