yoshitaka272 - Fotolia
Chipmaker Broadcom is set to acquire software company CA Technologies in a deal worth $19bn.
Broadcom has been on an acquisition spree since 2017, when it spent in excess of $5.9bn to take on board US data and network communications company Brocade.
Having failed in its attempt to purchase US wireless equipment provider Qualcomm for $17bn earlier this year, the company has extended its reach from hardware to IT infrastructure.
“This transaction represents an important building block as we create one of the world’s leading infrastructure technology companies,” said Hock Tan, president and chief executive officer of Broadcom.
“With its sizeable installed base of customers, CA is uniquely positioned across the growing and fragmented infrastructure software market, and its mainframe and enterprise software franchises will add to our portfolio of mission-critical technology businesses. We intend to continue to strengthen these franchises to meet the growing demand for infrastructure software solutions.”
The CA deal is the first major acquisition Broadcom has made outside its traditional networks business. In its 10k US Securities and Exchange Commission (SEC) filing for 2017, Broadcom reported £8.9bn revenue in its wired infrastructure business, $5.4bn revenue in its wireless communications business and $2.8bn in its enterprise storage business.
“We are excited to have reached this definitive agreement with Broadcom,” said Mike Gregoire, CEO of CA Technologies. “This combination aligns our expertise in software with Broadcom’s leadership in the semiconductor industry.
“The benefits of this agreement extend to our shareholders, who will receive a significant and immediate premium for their shares, as well as our employees, who will join an organisation that shares our values of innovation, collaboration and engineering excellence. We look forward to completing the transaction and ensuring a smooth transition.”
CA Technologies provides products covering advanced analytics, agile management, application programming interface (API) management, automation, the cloud, continuous delivery, continuous testing, plus an IT consulting business.
Through the acquisition, Broadcom effectively builds an enterprise software business, gaining a portfolio of more than 180 mainframe and enterprise products, including agile development, security and testing suites.