Broadcom signs $19bn deal for CA Technologies

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Broadcom might have failed in its acquisition of Qualcomm, but it will have to satisfy its purchasing needs with CA Technologies. The company has announced its acquisition of the software giant for $18.9 billion – cash.

Under the deal, CA's shareholders will be getting $44.50 per share, in cash. This equals a premium of 20 per cent to Wednesday's closing price, and a premium of some 23 per cent to CA's VWAP for the last month.

Broadcom expects its long-term Adjusted EBITDA margins to hit 55 per cent and above, and to be immediately accretive to Broadcom's non-GAAP EPS. The company expects to have 12 months of non-GAAP revenues, equalling to some $23.9 billion.

The transaction is subject to customary closing conditions, including the approval of CA shareholders and antitrust approvals in the U.S., the EU and Japan, the statement concludes. The transaction is expected to be finalised in the fourth quarter of this year.

“This transaction represents an important building block as we create one of the world's leading infrastructure technology companies,” commented Hock Tan, President and Chief Executive Officer of Broadcom.

“With its sizeable 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."

Image Credit: Broadcom