Broadcom finalized its acquisition of VMware’s end-user computing business for $69 billion in November of last year.
Late on Monday, following hours of speculation, chipmaker Broadcom signed a definitive agreement to sell its end-user computing unit to investment firm KKR for $4 billion.
Upon finalizing the transaction, the end-user computing (EUC) division will transform into a standalone company. It will be overseen by its current management team and led by Shankar Iyer, as per the announcement made by the investment firm in a statement.
According to KKR, the newly acquired division will have increased access to growth capital. Moreover, the firm unveiled plans to enhance the EUC’s research and development division and ‘go-to-market’ functions, such as sales, customer success and partner support teams.
Broadcom completed its acquisition of the end-user computing sector with its final $61 billion deal with VMware towards the end of November. This business sector comprises the desktop virtualization platform, Horizon, and the unified endpoint management platform, Workspace ONE.
Hock Tran, who is the sea captain at Broadcom, announced in December that the chip manufacturer intended to divest VMware’s non-core subdivisions, including its EUC and Carbon Black.
When probed on the specifics as to why they decided to divest these two sectors, Tan divulged that although both were valuable assets, Broadcom didn’t want to divert its attention with business segments that were non-core to the company’s interests and preferred to concentrate resources on departments with the highest added value to their model of operation.
The joint contribution of the end-user computing division and Carbon Black approaches a yearly revenue sum of $2 billion.
The EUC transaction, completed via KKR’s North America Fund XII, is projected to finalize in 2024.
Upon completion, the investment organization envisions the EUC division introducing its comprehensive employee ownership scheme, transforming all employees into stakeholders in their specific businesses along with KKR.
“The principal of this methodology is that employee participation and a potent ownership ambiance are crucial influences in constructing solid companies,” the investment firm declared, stating that from 2011 onward, KKR portfolio firms have dispensed equity in aggregate worth billions to over 60,000 non-senior leadership personnel across in excess of 40 portfolio corporations.
KKR has an extensive investment portfolio in the IT sector, inclusive of agreements made with BMC, Ensono, and Contabo.
