decor decor
"Whenever you find yourself on the side of the majority, it is time to pause and reflect."

-Mark Twain

Broadcom Makes $100+ Billion Offer for Qualcomm

Financial Information*
  • Transaction Value                          $130 B
  • EV/LTM Revenue                           5.9x
  • EV/LTM EBITDA                            20.9x
Transaction Facts
  • Semiconductor giant Broadcom (Nasdaq:AVGO) today announced a proposed takeover bid for fellow chip leader Qualcomm (Nasdaq:QCOM), totaling $130 billion in value including debt.
  • If approved, the deal would be the largest ever tech deal and create a behemoth in the smartphone component space.
  • In response, Qualcomm said only that it would have no comment until its board completes a review of the bid.
  • Shares of Broadcom rose 1.4 percent, while shares of Qualcomm rose approximately 1 percent.
Snowball Effect
  • Broadcom’s Latest and Greatest: Broadcom, once a division of HP, has grown significantly — in large part to to an aggressive appetite for M&A. Its current form is itself the product of an acquisition: Singapore-based Avago Technologies acquired Broadcom in 2015, taking on its name in what was then the largest tech deal ever.
  • Seizing a Perceived Opportunity: Qualcomm has been enduring a challenging period, seeing its share price fall approximately 20 percent in the last 12 months and engaging in dueling lawsuits by Apple over its patent licensing model. The company is also in the middle of its own large semiconductor acquisition — one year ago, it announced that it agreed to acquire NXP Semiconductors for an enterprise value of approximately $45 billion.
  • Tight Scrutiny: This deal is expected to face significant regulatory attention from an antitrust perspective, as well as from a national security perspective given Broadcom’s current legal headquarters location in Singapore. Broadcom President Hock Tan recently appeared with President Trump in the White House to announce that the company would be moving to the United States — with some analysts attributing the move to Broadcom’s need for political capital to spend on getting this deal approved.
  • The Goldilocks Factor: Analysts expect Qualcomm to reject the proposal, which at $70 per share represents a 28 percent premium to the deal’s closing price on Thursday before rumors of the deal were reported. The company believes it is positioned for growth thanks to its technology and patent portfolio, its pending NXP acquisition and successful resolution of its ongoing lawsuits from Apple.
For more information about this transaction, click here to read the press release.
*Transaction Value from Broadcom press release. Qualcomm financial information from S&P Capital IQ. 
martinwolf was not the advisor in this transaction.
previous post Back to Articles next post

24 Jan 2022

Tailwind Capital Sells AST Corp. to Recognize Partners

Financial Information ($USD) Not Disclosed  Transaction Details Tailwind Capital today announced it has completed its sale of AST Corporation to Recognize Partners, a technology services focused investment platform. Financial information was not disclosed. AST, a leading cloud and digital transformation solutions provider, simultaneously announced the deal, categorizing it as a strategic investment by Recognize to enable AST to accelerate investment in innovation,...

03 Jan 2022

Office Depot Sells CompuCom Systems

 Financial Information ($USD) Transaction Value: ~ $305 million Enterprise Value: $1.72 billion EV/LTM Revenue: 0.19x EV/LTM EBITDA: 3.85x  Transaction Details The ODP Corporation (NASDAQ: ODP) announced that it has sold its CompuCom Systems subsidiary to an affiliate of Variant Equity in a transaction valued up to $305 million. The transaction consideration of up to $305 million consists...

29 Dec 2021

Happy Holidays – The 2021 martinwolf Annual Letter

Dear Clients, Partners, and Friends of martinwolf M&A Advisors,   I hope you all are having an enjoyable holiday season with family and friends.   It’s been my tradition in this annual end-of-year letter to spend time reflecting on the past year, and to look forward to what the next year holds for us. We have plenty...