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Broadcom Buys CA Technologies for $18.9B

Mitch Wagner

Chipmaker Broadcom is making a drastic strategic shift to enterprise software, with a deal to buy software company CA Technologies for $18.9 billion, the companies announced Wednesday evening.

The deal, expected to close in the fourth quarter of calendar 2018, is Broadcom Corp. (Nasdaq: BRCM)'s bid to "build one of the world's leading infrastructure technology companies," Broadcom said in a statement Wednesday. (See Broadcom to Acquire CA Technologies for $18.9B.)

Under the terms of the agreement, which has been approved by the directors of both companies, CA Technologies (Nasdaq: CA) shareholders will get $44.50 per share in cash, a premium of about 20% to the closing price of CA common stock, and 23% to CA's volume-weighted average price to the last 30 trading days.

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"With its sizable 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," Hock Tan, Broadcom president and CEO, said in the company statement.

CA's solutions are designed to help enterprises of all sizes develop, manage and secure complex IT environments, including mainframes and enterprise solutions. Average booking duration exceeds three years, giving CA predictable and recurring revenues, with operations across 30 countries.

Broadcom dried its eyes fast after being blocked from acquiring Qualcomm. Broadcom put the kibosh on those plans in March after President Trump issued an order blocking the acquisition on "national security" grounds. (See Broadcom Formally Drops $117B Qualcomm Bid.)

Broadcom stock was down 6.67% after hours, to $227.20. CA was up 15.29%, to $42.90.

An earlier version of this story reported the deal as rumored.

— Mitch Wagner Follow me on Twitter Visit my LinkedIn profile Visit my blog Follow me on FacebookExecutive Editor, Light Reading

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7/12/2018 | 2:53:54 PM
Broadcom Shares Spanked Today
Down $34.59 at $208.88 right now down from close at $243.33. Ouch!


Guess people don't get this buyout.
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