Irvine, California – Chipmaker Broadcom is on the brink of finalizing a $3.8 billion deal to offload its end-user computing (EUC) unit to private-equity firm KKR. This move comes as part of Broadcom CEO Hock Tan’s strategy to streamline the company’s operations following its acquisition of software maker VMware for $69 billion in November.
The potential deal signals a shift in Broadcom’s focus as it looks to divest its end-user computing unit while concurrently exploring options to sell off VMware’s security software business Carbon Black. KKR emerged as the winner in the auction for the EUC unit, outbidding other private equity firms such as EQT.
Speculation is rife that an official announcement regarding the deal could be made as early as Monday, as parties involved maintain secrecy due to the sensitive nature of the negotiations. Meanwhile, KKR has remained tight-lipped about the matter, while requests for comments from Broadcom and EQT have gone unanswered.
KKR’s track record in the sector showcases its propensity for strategic dealmaking. In 2018, the firm acquired U.S. business software company BMC for $8.5 billion before later merging it with Compuware. More recently, KKR purchased information services technology provider Ensono from private-equity firms Charlesbank Capital Partners and M/C Partners for approximately $1.7 billion.
Advisory roles in the current transaction are held by Evercore, Deutsche Bank, and Jefferies for KKR, with Citigroup providing counsel to Broadcom. Additionally, UBS Group, Jefferies, and KKR’s capital market unit are facilitating debt financing for the deal.