Semiconductor device supplier Broadcom will acquire CA Technologis for $18,9-billion in cash.
Under the terms of the agreement, which has been approved by the boards of directors of both companies, CA’s shareholders will receive $44.50 per share in cash. This represents a premium of approximately 20% to the closing price of CA common stock on July 11, 2018, the last trading day prior to the transaction announcement, and a premium of approximately 23% to CA’s volume-weighted average price (“VWAP”) for the last 30 trading days.
The all-cash transaction represents an equity value of approximately $18,9-billion, and an enterprise value of approximately $18,4-billion.
Hock Tan, president and CEO of Broadcom, says: “This transaction represents an important building block as we create one of the world’s leading infrastructure technology companies. 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.”
“We are excited to have reached this definitive agreement with Broadcom,” said Mike Gregoire, CEO of CA Technologies. “This combination aligns our expertise in software with Broadcom’s leadership in the semiconductor industry. The benefits of this agreement extend to our shareholders who will receive a significant and immediate premium for their shares, as well as our employees who will join an organization that shares our values of innovation, collaboration and engineering excellence. We look forward to completing the transaction and ensuring a smooth transition.”
The transaction is expected to drive Broadcom’s long-term Adjusted EBITDA margins above 55% and be immediately accretive to Broadcom’s non-GAAP EPS. On a combined basis, Broadcom expects to have last twelve months non-GAAP revenues of approximately $23,9-billion and last twelve months non-GAAP Adjusted EBITDA of approximately $11,6-billion.
CA’s mainframe and enterprise software solutions help organisations of all sizes develop, manage, and secure complex IT environments that increase productivity and enhance competitiveness. CA operates across 40 countries and currently holds more than 1 500 patents worldwide, with more than 950 patents pending.