Broadcom nears $3.8 billion deal to sell end-user computing business to KKR

Chipmaker Broadcom is on the brink of finalising a $3.8 billion agreement to offload its end-user computing (EUC) business to private equity giant KKR, according to sources familiar with the matter.

This move marks a strategic decision by Broadcom CEO Hock Tan to streamline the company's portfolio following its massive $69 billion acquisition of software firm VMware in November. The transaction signals Broadcom's commitment to optimising its business focus in line with evolving market demands.

KKR emerged victorious in the competitive bidding process for Broadcom's EUC unit, outbidding other prominent private equity players, including EQT, sources revealed.

The deal, anticipated to be formally announced as early as Monday, is shrouded in confidentiality, with sources requesting anonymity due to the sensitive nature of the discussions.

While KKR declined to comment on the matter, neither Broadcom nor EQT responded immediately to requests for comment.

Broadcom had previously flags its intention to divest its end-user computing division in December as part of its strategic realignment efforts.

Concurrently, the company is also actively exploring options to divest VMware's security software business, Carbon Black.

The near sale of the EUC unit stresses Broadcom's strategic agility in reshaping its business landscape to enhance competitiveness and drive sustainable growth in core areas.

KKR's involvement in the acquisition aligns with its track record of strategic dealmaking within the technology sector.

Notably, the private equity firm executed the acquisition of US, in 2018, business software provider BMC was bought for $8.5 billion. Subsequently, KKR orchestrated the merger of BMC with Compuware, a company it acquired from buyout firm Thoma Bravo, two years later.

Additionally, in 2021, KKR bolstered its technology portfolio by acquiring information services technology provider Ensono for approximately $1.7 billion.

The transaction is being facilitated by prominent financial advisory firms, with Evercore, Deutsche Bank, and Jefferies advising KKR on the deal, while Citigroup is providing advisory services to Broadcom, as per insider sources.

(With inputs from Reuters)