decor decor
"The phoenix must burn to emerge."

-Janet Fitch

Broadcom to Buy Brocade Communications

Financial Information
  • Enterprise Value                            $5.6 billion
  • EV/LTM Revenue                          2.4x
  • EV/LTM EBITDA                           11.3x
Transaction Facts
  • Broadcom Limited (Nasdaq: AVGO) announced today that it agreed to acquire Brocade Communications Systems (Nasdaq:BRCD).
  • Brocade investors will receive 12.75 per share in cash in the transaction, representing a 47 percent premium over Brocade’s closing price Friday.
  • Broadcom shares closed today up 2.23 percent, though they declined 1.5 percent after hours.
  • The transaction is scheduled to close sometime in the second half of Broadcom’s fiscal year, which began October 31.
Consolidation Continues in Semiconductor Space 
  • One Year Later, Making Big WavesBroadcom Limited, originally Avago before taking Broadcom’s name as part of a $37 billion acquisition, continues to dramatically grow and improve the business – this time by expanding into storage area networking space.
  • Billions and Billions Sold: The semiconductor industry has seen significant consolidation in recent months, with over $100 billion in deals in the last 24 months. Acquisitions have included Qualcomm’s agreement to purchase NXP Semiconductors for $45 billion, Intel’s $17 billion purchase of Altera and Softbank’s $32 billion acquisition of ARM Holdings.
  • Targeted Growth: Broadcom also announced that it plans to divest Brocade’s IP Networking business, acquired in its $1.5 billion purchase of Ruckless Wireless in April and including wireless networking, switching and routing and software networking solutions – some of which compete with Broadcom’s largest customers such as Cisco and HP Enterprise. However, the broader acquisition is not conditional on this divestiture.
  • Branching out and Lifting Pressure: Broadcom is a heavy supplier of wireless chips to smartphone manufacturers, and like Qualcomm is facing increased pressure thanks to market maturation. This deal helps diversify its customer set, preserving margins in a competitive industry.
For more information about this transaction, click here to read the press release.
martinwolf was not the advisor in this transaction.
previous post Back to Articles next post

18 Oct 2021

CDW To Acquire Sirius Computer Solutions

Financial Information ($USD) Enterprise Value: $2.5 Billion EV/REV: 1.23x Transaction Details CDW Corporation today announced it has entered into a definitive agreement to acquire Sirius Computer Solutions, Inc from an affiliate of Clayton, Dubilier & Rice for $2.5 billion in cash. Sirius, a leading provider of secure, mission-critical technology-based solutions, generated 2020 net sales of $2.04 billion with approximately 3,900...

29 Sep 2021

H.I.G. Capital Announces Sale of Trace3

Financial Information Not Disclosed Transaction Details H.I.G. Capital announced that one of its affiliates has entered into a definitive agreement to sell Trace3, a premier provider of IT solutions and services, to affiliates of American Securities. Financial terms of the transaction are not being disclosed, but the press release cites Trace3 revenue of $1.4 billion....

02 Aug 2021

TowerBrook Capital Partners Makes Strategic Investment in EisnerAmper LLP

Transaction Details TowerBrook Capital Partners, an international investment management firm, has made a strategic investment in EisnerAmper, one of the largest professional services firms in the world, offering premier accounting, tax and business advisory services. The firm will now operate two divisions: EisnerAmper LLP, a licensed CPA firm, will provide attest services; and Eisner Advisory Group LLC,...