Broadcom, a semiconductor device supplier to the wired, wireless, enterprise storage and industrial end markets, and CA Technologies, a provider of information technology (IT) management software and solutions, have announced that they have entered into a definitive agreement under which the former has agreed to acquire the latter to build what they call one of the world's leading infrastructure technology companies.
Under the terms of the agreement, which has been approved by the boards of directors of both companies, CA's shareholders will receive US$44.50 per share in cash, according to the announcement. 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 US$18.9 billion, and an enterprise value of approximately US$18.4 billion.
Hock Tan, president and CEO of Broadcom, 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."
"We are excited to have reached this definitive agreement with Broadcom," said Mike Gregoire, CA's CEO. "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."