Broadcom, the chipmaker company, is reportedly close to finalizing a deal worth $3.8 billion to sell its end-user computing (EUC) unit to private-equity firm KKR. This move comes as Broadcom’s CEO, Hock Tan, aims to streamline the company’s portfolio following its acquisition of software maker VMware for $69 billion in November.
The potential deal with KKR signifies Broadcom’s commitment to focusing on its core business and divesting non-essential units. The EUC unit enables users to access desktops and applications from any device, and KKR emerged as the winner in the auction for this unit, surpassing other private equity firms like EQT.
While the deal has not been officially announced, sources familiar with the matter suggest that it could be made public as early as Monday. However, these sources have requested anonymity due to the confidential nature of the discussions. KKR declined to comment, and both Broadcom and EQT have not yet responded to requests for comment.
Broadcom had previously expressed its intention to divest its end-user computing unit in December. Additionally, the company is also seeking to sell VMware’s security software business Carbon Black separately.
KKR has a history of successful deals in the technology sector. In 2018, the firm acquired U.S. business software company BMC for $8.5 billion and later merged it with Compuware, which it had acquired from buyout firm Thoma Bravo. Earlier this year, KKR purchased information services technology provider Ensono for approximately $1.7 billion from private-equity firms Charlesbank Capital Partners and M/C Partners.
The transaction is being advised by Evercore, Deutsche Bank, and Jefferies on behalf of KKR, while Citigroup is advising Broadcom. UBS Group, Jefferies, and KKR’s capital market unit are providing debt financing for the deal.
Broadcom’s decision to sell its EUC unit to KKR reflects the company’s strategic focus on its core business and the desire to streamline its operations. As the deal progresses, it will be interesting to see how this divestment impacts Broadcom’s overall portfolio and future growth prospects.