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14 August, 2019 - 20:58 By Tony Quested

Broadcom makes $10.7bn acquisition

US tech giant Broadcom, which has a major presence at Cambridge Science Park, has wheeled out a $10.7 billion cash acquisition.

The company, which designs, develops and supplies semiconductor and infrastructure software solutions, has agreed to buy the enterprise security business of Symantec Corporation.

Broadcom says the addition of Symantec’s enterprise security portfolio will significantly expand its infrastructure software footprint as it continues to build one of the world’s leading infrastructure technology companies.

Hock Tan, president and CEO of Broadcom, said: “M & A has played a central role in Broadcom’s growth strategy and this transaction represents the next logical step following our acquisitions of Brocade and CA Technologies. 

“Symantec’s enterprise security business is recognised as an established leader in the growing enterprise security space and has developed some of the world’s most powerful defence solutions that protect against today’s evolving threat landscape and secure data from endpoint to cloud.”

The deal is expected to drive more than $2bn of sustainable, incremental, run-rate revenues and approximately $1.3bn of Pro Forma EBITDA, including synergies. It is anticipated to generate more than $1bn of run-rate cost synergies within 12 months following close. Broadcom also expects to achieve double-digit cash-on-cash returns on its investment.

Broadcom has also reaffirmed its fiscal year 2019 revenue guidance of $22.5bn, with $17.5bn from semiconductor solutions and $5bn from infrastructure software.

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