from the July 2011 issue

VMware buys SaaS Digital Fuel for $85m.

VMware has announced its second Israeli acquisition.

VMware Inc. (NYSE: VMW) has announced that it has acquired Israeli SaaS company Digital Fuel Ltd.. No price for the acquisition was disclosed but it is believed to be for about $85 million.

Digital Fuel is a veteran developer of SaaS IT financial management solutions. CEO Israel Dancziger, CTO Gilad Raz, VP engineering Yakov Kogan, and Benny Lehman who died in 2004, founded the company in 2000. The company has a large number of investors, including Benchmark Capital, Israel Seed Partners, Apax Partners, Sigma Capital, and Check Point Software Technologies Ltd. (Nasdaq: CHKP) founder Shlomo Kramer. $45 million has been invested in Digital Fuel to date.

The acquisition will be VMware's second in Israel, having bought B-Hive Ltd. three years ago for $60 million and built operations of its Israel development center in Herzliyah Pituach around it.

The acquisition of Digital Fuel will add 150 employees to VMware's work force, a third of them at Digital Fuel's Israeli development center. The acquisition could therefore increase the work force at VMware's Israeli development center by over 50%.

Reprinted from the Israel High-Tech & Investment Report July 2011

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