Broadcom Sells End-User Computing Unit to KKR for $4 Billion

Chipmaker Broadcom has struck a deal to sell its end-user computing (EUC) unit to private-equity firm KKR for approximately $4 billion. The transaction comes on the heels of Broadcom’s massive acquisition of VMware last year, signaling the company’s efforts to simplify its business structure.

The EUC unit, which enables users to access desktops and applications from any device, will transition into a standalone company under KKR’s ownership. In a statement released on Monday, KKR confirmed that the existing management team, led by Shankar Iyer, will continue to oversee operations.

News of the deal, initially reported by Reuters on Saturday, revealed that KKR emerged victorious in an auction for the EUC unit, outbidding other private equity firms such as EQT. The move underscores KKR’s continued interest in the technology sector and its appetite for strategic acquisitions.

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Broadcom’s acquisition of VMware, valued at a staggering $69 billion, was one of the largest deals globally when announced in May 2022. However, the transaction encountered various regulatory obstacles before closing more than a year later, in November 2023. Notably, regulatory approval from China was crucial for finalizing the acquisition.

Following the VMware acquisition, Broadcom announced its intention to divest its EUC unit in December. The sale to KKR marks a significant step in executing this plan, with Broadcom also seeking to offload VMware’s security software business, Carbon Black.

KKR’s recent acquisitions in the technology sector further highlight its strategic focus on the industry. In 2018, the firm acquired U.S. business software company BMC for $8.5 billion. Subsequently, KKR merged BMC with Compuware, another technology firm it acquired from buyout firm Thoma Bravo two years later.

Source: Reuters