Broadcom Inc., a global technology leader that designs, develops and supplies semiconductor and infrastructure software solutions, and VMware Inc., an innovator in enterprise software, announced an agreement under which Broadcom will acquire all the outstanding shares of VMware in a cash-and-stock transaction that values VMware at approximately $61 billion, based on the closing price of Broadcom common stock on May 25.
In addition, Broadcom will assume $8 billion of VMware net debt. VMware, provider of multi-cloud services for all apps, pioneered virtualization technology, an innovation that transformed x86 server-based computing. VMware then created the software defined data center and played a leading role in virtualizing networking and storage, before evolving to become a hybrid cloud and digital workspace leader.
Today, VMware’s multi-cloud portfolio, spanning application modernization, cloud management, cloud infrastructure, networking, security and anywhere workspaces, forms a flexible, consistent digital foundation on which the largest and most dynamic enterprises across industries build, run, manage, connect and protect their most important and complex workloads for the benefit of their customers.
Following the closing of the transaction, the Broadcom Software Group will rebrand and operate as VMware, incorporating Broadcom’s existing infrastructure and security software solutions as part of an expanded VMware portfolio.
By bringing together the complementary Broadcom Software portfolio with the VMware platform, the combined company will provide enterprise customers an expanded platform of critical infrastructure solutions to accelerate innovation and address the most complex information technology infrastructure needs. The combined solutions will enable customers, including leaders in all industry verticals, greater choice and flexibility to build, run, manage, connect and protect applications at scale across diversified, distributed environments, regardless of where they run: from the data center to any cloud and to edge-computing.
With the combined company’s shared focus on technology innovation and significant research and development expenditures, Broadcom will deliver compelling benefits for customers and partners. The transaction is expected to add approximately $8.5 billion of pro forma EBITDA from the acquisition within three years post-closing. Pro forma for each company’s fiscal year 2021, software revenue is expected to account for approximately 49%peercent of total Broadcom revenue.
