Set micro-network news (text / Xiaobei) On Wednesday, Broadcom announced that it plans to acquire US commercial software company CA Technologies (hereinafter referred to as 'CA') for US$18.9 billion. The transaction is expected to be completed by the end of 2018. It was the first major merger case proposed by Broadcom after the Qualcomm acquisition was suspended by the Trump administration.
According to sources, Broadcom will acquire all of CA's outstanding shares at a price of $44.50 per share. Based on CA's closing price of $37.21 on Wednesday, the transaction's premium is about 20%, which is the average share price of CA's past 30 trading days. The premium is about 23%.
For this transaction, both parties showed a positive attitude.
Hock Tan, President and CEO of Broadcom, said, 'This transaction is an important part of our creation of one of the world's leading infrastructure technology companies. With a large customer base, CA has uniquely spanned the growing The fragmented infrastructure software market, its central processing unit and enterprise software products will add luster to our key technology business.
CA company CEO Mike Gregoire said in a public statement: 'We are pleased to reach an agreement with Broadcom that will align our software expertise with Broadcom's leadership in the semiconductor industry.'
The transaction is expected to boost Broadcom's adjusted EBITDA to 55% and an immediate increase in earnings per share (Non-GAAP). In conjunction with CA's financial data, Broadcom is expected to In the next 12 months, it will achieve $23.9 billion in revenue (Non-GAAP calculation), and EBITDA will reach $11.6 billion.
CA Technologies is a company founded by Wang Jialian, a famous Chinese entrepreneur in the United States. It was the second largest software vendor in the world after Microsoft. Since its establishment in the 1980s, CA has expanded its capabilities with a series of mergers and acquisitions, and has achieved rapid development. This is similar to Broadcom's growth path. CA's predecessor was Computer Associates, which was the first to provide large computers for banks and other large organizations. Currently, CA has moved most of its business to the cloud, with operations in 40 countries. With more than 1,500 patents (and more than 950 patents pending), it is a leading provider of cloud computing and cross-platform IT management. CA's solutions can help companies of all sizes develop, manage and protect complexities. IT environment to increase productivity and enhance competitiveness.
Although today's CA lags far behind Microsoft, IBM, and other companies in its scale, its products and technologies cover all IT environments, from host to distributed systems, from virtualization to the cloud. A long-term partner of CA is IBM, both A recently announced collaboration is to jointly develop and sell new services for IBM Cloud Managed Services on zSystem (zCloud), which will provide a complete set of mainframe software solutions. Some analysts said that this partnership can help IBM Bring the host closer to the cloud world.
According to industry insiders, CA's revenue in 2017 reached US$4.2 billion and its operating cash flow was US$1.2 billion. Although the acquisition of CA does not bring significant growth in performance, it can diversify Broadcom's business and expand its software business. Bring steady cash flow. IC company (Broadcom) to acquire IT companies (CA), or to shake the IT circle, will have a certain impact on the future industrial structure.
It is reported that in view of the last time the US government blocked the acquisition of Qualcomm on the grounds of endangering national security, the Financial Times said that Broadcom did not intend to seek approval from the US Foreign Investment Committee (CFIUS).
In order to avoid the review of the US Foreign Investment Committee (CFIUS), Broadcom moved its headquarters from Singapore to San Jose, California, as early as April this year, and the company name was changed from Broadcom Ltd to a larger capital. Broadcom Inc.
Broadcom expects that the M&A transaction will complete all procedures from October to December 2018. Prior to this, it must obtain approval from CA shareholders and pass antitrust approvals in the US, EU and Japan.