Broadcom nears $3.8 billion deal to sell EUC business to KKR in portfolio streamlining effort

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In a strategic move, chipmaker Broadcom is reportedly on the cusp of finalizing a deal to offload its end-user computing (EUC) business for a staggering $3.8 billion to private equity titan KKR. The deal, which is expected to be officially announced as early as Monday, marks a significant step for Broadcom CEO Hock Tan in streamlining the company’s expansive portfolio following its landmark $69 billion acquisition of software giant VMware last November.

According to sources close to the matter, KKR emerged victorious in a fierce auction for the EUC unit, besting other notable private equity contenders such as Sweden-based EQT AB. This latest move underscores Tan’s commitment to reshaping Broadcom’s focus, with the company also looking to divest VMware’s security software arm, Carbon Black.

KKR, a seasoned player in the tech dealmaking arena, has a track record of transformative acquisitions. In 2018, the firm made headlines with its $8.5 billion acquisition of U.S. business software company BMC, later merging it with Compuware. More recently, in 2021, KKR acquired Ensono, an information services technology provider, for approximately $1.7 billion.

The transaction is being steered by top financial advisory firms Evercore, Deutsche Bank, and Jefferies, advising KKR, while Citigroup is representing Broadcom. UBS Group, Jefferies, and KKR’s capital market unit are reportedly providing debt financing for the deal.

While Broadcom, KKR, and the other parties involved have refrained from commenting on the matter, industry insiders anticipate that this strategic move will not only bolster Broadcom’s financial standing but also position it for future growth and innovation in the ever-evolving tech landscape.

(Source: The Globe and Mail | Reuters | Seeking Alpha)

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