Chipmaker Broadcom is on the brink of finalising a $3.8 billion agreement to offload its EUC business

Chipmaker Broadcom is on the verge of finalizing a $3.8 billion deal to sell its end-user computing (EUC) business to private equity behemoth KKR, according to sources familiar with the matter.

This decision by Broadcom CEO Hock Tan to divest the EUC business comes as part of a strategic move to streamline the company’s portfolio following its mammoth $69 billion acquisition of software firm VMware in November. The transaction underscores Broadcom’s dedication to refining its business focus to align with evolving market dynamics.

KKR emerged as the winning bidder in a competitive auction for Broadcom’s EUC unit, surpassing other prominent private equity contenders like EQT, as per sources. The deal, expected to be officially announced as soon as Monday, is being kept under wraps, with sources preferring anonymity due to the sensitive nature of the negotiations.

While KKR declined to comment on the matter, both Broadcom and EQT have yet to respond to requests for comment.

Broadcom had previously signaled its intention to offload its end-user computing division in December as part of its strategic restructuring efforts.

Simultaneously, the company is actively exploring options to divest VMware’s security software business, Carbon Black.

The impending sale of the EUC unit underscores Broadcom’s strategic agility in reshaping its business landscape to bolster competitiveness and foster sustainable growth in core sectors.

KKR’s participation in the acquisition aligns with its track record of strategic deal-making in the technology realm.

Notably, the private equity firm orchestrated the acquisition of US business software provider BMC in 2018 for $8.5 billion. Subsequently, KKR facilitated the merger of BMC with Compuware, a company it acquired from buyout firm Thoma Bravo, two years later.

Moreover, in 2021, KKR bolstered its technology portfolio by acquiring information services technology provider Ensono for approximately $1.7 billion.

The transaction is being facilitated by prominent financial advisory firms, with Evercore, Deutsche Bank, and Jefferies advising KKR on the deal, while Citigroup is providing advisory services to Broadcom, according to insider sources.