New York City, NY – Chipmaker Broadcom is on the verge of finalizing a $3.8 billion deal to sell its end-user computing unit to private equity firm KKR, sources familiar with the matter confirmed on Saturday. This move comes as Broadcom’s CEO, Hock Tan, aims to streamline the company’s operations following the completion of its $69 billion acquisition of software maker VMware in November.
KKR emerged victorious in the auction for Broadcom’s end-user computing (EUC) division, beating out other competitors, including EQT. The deal is expected to be officially announced as early as Monday, although sources have requested anonymity given the confidential nature of the matter. Both KKR and Broadcom have refrained from commenting on the deal thus far.
Broadcom had previously expressed its intention to divest its end-user computing unit in December, in conjunction with efforts to offload VMware’s security software business Carbon Black. On the other hand, KKR is no stranger to strategic acquisitions in the technology sector, with previous notable deals including the purchase of business software company BMC for $8.5 billion in 2018, as well as the acquisition of information services technology provider Ensono in 2021 for about $1.7 billion.
For this transaction, KKR is being advised by Evercore, Deutsche Bank, and Jefferies, while Citigroup is providing advisory services to Broadcom. UBS Group, Jefferies, and KKR’s capital market unit are set to offer debt financing for the deal. With the potential deal on the horizon, investors and industry insiders are closely watching to see how this move will impact both Broadcom and KKR in the competitive tech landscape.
This strategic move by Broadcom and KKR highlights the ongoing reshaping of the technology industry as companies adapt to changing market dynamics and seek to position themselves for future growth. Stay tuned for further developments as the details of the deal unfold in the coming days.