Broadcom to buy software company CA Technologies for $18.9 billion
Broadcom to buy CA Technologies for $18.9 billion
7:36 PM EDT July 11, 2018
6:03 PM EDT July 12, 2018
12. Broadcom Inc. (NASDAQ: AVGO) >Market Cap: $102.51 billion >Revenue: $17.64 billion >Net Income: $1.78 billion [October - reported as Broadcom Ltd.] >Shares outstanding: 409.36 million >Employees: approximately 14,000 Broadcom's failed effort at a hostile takeover of Qualcomm kept its name front and center of the business pages for months. Since then, the semiconductor maker has re-domiciled from Singapore to the United States and change its name (slightly) from an Ltd. to an Inc. Even without Qualcomm's communications chip business, Broadcom has a solid foothold in the wireless networking, enterprise storage, and industrial sectors. For the current fiscal year, analysts forecast revenue of $20.79 billion and have a 12-month consensus price target on the stock of $310.34. ALSO READ: States Where Americans Are Paying the Most Taxes
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Broadcom and CA Technologies on Wednesday announced that Broadcom has agreed to acquire the enterprise technology company for $18.9 billion in cash.
The deal values CA stock at about $44.50 per share, or a premium of about 20 percent to the closing price of CA common stock on July 11.
The acquisition represents a strategic win for Broadcom, furthering its mission to acquire "mission critical technology businesses," following its failed takeover bid for rival Qualcomm.
CA Technologies, which manufactures cloud-based and traditional enterprise software, could help diversify Broadcom, should it gain antitrust approvals in the U.S., the E.U. and Japan. The boards of both companies have already approved the deal.
Shares of CA Technologies soared more than 16 percent in extended trading, after an earlier report by the Wall Street Journal that Broadcom was close to acquiring the software company.
Shares of Broadcom edged down more than 5 percent, pushing the stock down to about $299 per share. Broadcom is down more than 5 percent year-to-date, amid a tumultuous year for the chipmaker's stock value.