Chipmaker Broadcom is reportedly close to finalizing a $3.8 billion deal to sell its end-user computing (EUC) unit to private equity firm KKR, according to sources familiar with the matter. This move comes as Broadcom’s CEO, Hock Tan, aims to streamline the company’s portfolio following its $69 billion acquisition of software maker VMware in November.
The potential deal with KKR signifies Broadcom’s commitment to focusing on its core business and divesting non-essential assets. The EUC unit enables users to access desktops and applications from any device, and it seems that KKR emerged as the winner in an auction for the unit, beating out other private equity firms such as EQT.
While the deal has not been officially announced, sources suggest that it could be made public as early as Monday. However, due to the confidential nature of the matter, the sources have requested anonymity. Both KKR and Broadcom declined to comment on the potential deal, and EQT did not respond 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 offload VMware’s security software business, Carbon Black, as part of its efforts to streamline operations.
KKR has a history of successful dealmaking 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, a company it had purchased from buyout firm Thoma Bravo. Earlier this year, KKR also acquired 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 end-user computing unit aligns with its strategy to focus on its core business and optimize its portfolio. The potential deal with KKR represents a significant step in this direction, allowing Broadcom to streamline operations and allocate resources more efficiently. As the technology landscape continues to evolve, it is crucial for companies like Broadcom to adapt and prioritize their key strengths to remain competitive in the market.
