KKR & Co KKR is reportedly close to finalizing a purchase of a software division from Broadcom Inc AVGO for approximately $4 billion, with the announcement potentially expected on Monday.
The unit in question, acquired by Broadcom through its $61 billion takeover of VMware Inc. in 2023, specializes in software that facilitates remote desktop and application access for users.
While KKR has not commented on the deal and Broadcom has yet to respond, other equity firms like EQT AB and Thoma Bravo have shown interest in this acquisition, Bloomberg reports.
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Broadcom, based in San Jose, is looking to offload another VMware asset, Carbon Black, a security software unit potentially worth around $1 billion, including debt.
This sale comes after Broadcom finalized its acquisition of VMware in November, following an 18-month regulatory review, including approval from China.
In November 2023, a leaked email of Broadcom revealed its plans to review “strategic alternatives” of two of VMware’s business units.
Broadcom’s CEO, Hock Tan, aims to use this acquisition to expand the company’s presence in hybrid cloud services, appealing to businesses utilizing private and external data storage solutions.
KKR has a history of significant investments in the technology sector, including purchasing BMC for $8.5 billion in 2018, merging it with Compuware, and acquiring Ensono for approximately $1.7 billion in 2021, Reuters reports.
Financial advisory firms Evercore, Deutsche Bank, and Jefferies advise KKR on this transaction, while Citigroup represents Broadcom. Additionally, UBS Group, Jefferies, and KKR’s capital market unit are arranging the debt financing for the acquisition.
This move by Broadcom to divest certain assets reflects a broader trend in the tech industry, where companies streamline their portfolios to focus on core areas of growth, especially in the competitive cloud and software markets.
Price Action: AVGO shares traded higher by 0.86% at $1,307.55 premarket Monday.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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