Broadcom intends to fund the transaction with cash on hand and $18.0 billion in new, fully-committed debt financing, the companies say. Both boards have approved the deal, which is now subject to regulatory approval.
In a prepared statement, Broadcom President and CEO Hock Tan (pictured above) said:
"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."
Added CA CEO Mike Gregoire:
"We are excited to have reached this definitive agreement with Broadcom. 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."
CA Technologies: Business Evolution
CA Technologies has been the subject of multiple takeover and merger rumors in recent years. Most of the speculation has involved a potential BMC-CA merger, but those discussions apparently ended in 2017.
Like many mainframe and client-server software companies, CA has spent recent years transitioning to cloud and subscription service offerings. The company has had some job cuts amid that transition. Best known as an enterprise software company, CA also has a strong following among midmarket and large MSPs.
In stark contrast, Broadcom best known as a semiconductor provider. Amid that reality, chatter about a potential Broadcom-CA Technologies business combination earlier today took Wall Street by surprise.