includes any. Chipmaker Broadcom is buying cybersecurity specialist Symantec Corporation's enterprise security business for $10.7 billion in cash, the companies announced Thursday. Of course, the challenge of integrating a large acquisition makes this a somewhat risky play.Because regulators might still stand in the way of Broadcom’s acquisition of another hardware maker, its purchase of CA makes more sense. The company’s priority is to reduce its debt to the tune of around $10.5 billion before it considers any more acquisitions.Let’s take a look at Broadcom’s stock’s performance post-merger.M&As aren’t new for Broadcom. Acquirer Name .
With this deal, Broadcom is well-positioned to build services that are integrated from the sensor to the cloud.While the business and innovation case for the deal is important, regulatory impacts also likely played a key role in Broadcom’s decision making.One of the biggest risks to enterprises currently engaged with CA is that they could face significant tumult as Broadcom seeks to improve the profits of the business it acquires.CA’s mainframe software business, which makes up the largest portion of its revenue, seems like the least logical fit for Broadcom.
SAVE SEARCH . It’s this business opportunity that seems to be the best possible outcome of the deal for both firms.Broadcom’s announcement of the acquisition was notably vague about its plans for. The company has a history of successful M&As, and the most recent Avago-Broadcom merger is its biggest M&A deal to date.
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One clear opportunity for the newly joined company would be providing a combined software and hardware offering for enterprises to better take advantage of the internet of things.A combined IoT offering would be a good use of CA’s emerging cloud and digital service portfolio and Broadcom’s business building sensors. This could make the chip company, which has a long history of acquisitions, more like Japan-based Softbank, a technology conglomerate with several disparate businesses.But Broadcom has a history of successfully leveraging acquisitions.
Cloud vendors like Microsoft and Amazon Web Services are investing heavily in offerings that combine hardware with software but rely on chipmaker partnerships.
Broadcom now has a net debt-to-adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) multiple of 4.5x, which it looks to reduce to 2x before thinking of any other M&A (mergers and acquisitions) transactions.With these divestitures, Broadcom looks to repay $1 billion of its $25 billion of debt.
It acquired a number of other companies and changed its name to Broadcom after acquiring Broadcom Computing in 2016.The acquisition also provides Broadcom with a potential source of profit growth.
Moving into the IoT and other emerging technology areas could put the combined firm on a path to take advantage of where enterprises will be going, not just where they are right now. Given the company’s history of divesting itself of businesses it previously acquired, it’s possible the mainframe software portion of CA or others will be sold to yet another company, further complicating the customer experience – but that likely won’t take place for a little while yet.Broadcom highlighted that the deal will increase the company’s total addressable market and open it up to new business opportunities. Broadcom . It was originally spun out of Hewlett-Packard as part of Agilent Technologies in 1999, and then was acquired by KKR and Silver Lake Partners in 2005 as Avago Technologies. Operator.
It has a history of successful M&As, and the most recent Avago-Broadcom merger is its biggest deal to date. Mergers and acquisitions aren’t new for Broadcom.
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broadcom acquisitions history