Fresh from its failure to acquire Qualcomm in March, Broadcom has made a move for former software giant CA Technologies. The US$18.9b deal brings together two unlikely partners — one a chipmaker and the other a software company that had its glory days in the 1990s.
Just like Broadcom, CA is very familiar with the acquisition business, having grown through a series of acquisitions in the past.
Under the terms of the agreement, which has been approved by the boards of directors of both companies, CA’s shareholders will receive US$44.50 per share in cash. This represents a premium of approximately 20 percent to the closing price of CA common stock on July 11, 2018, the last trading day prior to the transaction announcement, and a premium of approximately 23 percent to CA’s volume-weighted average price for the last 30 trading days.
The all-cash transaction represents an equity value of approximately US$18.9 billion, and an enterprise value of approximately US$18.4 billion.
“This transaction represents an important building block as we create one of the world’s leading infrastructure technology companies,” Hock Tan, President and Chief Executive Officer of Broadcom.
“With its sizeable installed base of customers, CA is uniquely positioned across the growing and fragmented infrastructure software market, and its mainframe and enterprise software franchises will add to our portfolio of mission critical technology businesses. We intend to continue to strengthen these franchises to meet the growing demand for infrastructure software solutions,” he added.