Broadcom agreed to acquire CA Technologies (NASDAQ: CA) for $44.50 per share in cash, representing an enterprise value of $18.9 billion — a premium of approximately 20% to the closing price of CA common stock on July 11, 2018.
CA, which was founded by Charles Wang and Russell Artzt in 1976 and formerly known as Computer Associates, is one of the world’s leading providers of information technology (IT) management software and solutions. The company is based in New York City and is primarily known for its B2B mainframe, distributed computing, and enterprise software.
Broadcom notes that CA benefits from predictable and recurring revenues with the average duration of bookings exceeding three years.
Hock Tan, President and Chief Executive Officer of Broadcom, said, “This transaction represents an important building block as we create one of the world’s leading infrastructure technology companies. 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.”
“We are excited to have reached this definitive agreement with Broadcom,” said Mike Gregoire, CA Technologies Chief Executive Officer. “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 organization that shares our values of innovation, collaboration and engineering excellence. We look forward to completing the transaction and ensuring a smooth transition.”
Trump blocks Broadcom’s proposed takeover of Qualcomm
President Trump signed an executive order prohibiting Broadcom from acquiring Qualcomm or proceeding with any substantially equivalent merger, acquisition, or takeover of the firm whether effected directly or indirectly.
The order cited “credible evidence” that Broadcom, along with its partners, subsidiaries, or affiliates, impairs the national security of the United States.
Trump said he was taking this action upon review of a recommendation from the Committee on Foreign Investment in the United States.
Broadcom issued a statement saying it was reviewing the order.
Qualcomm issued a statement saying all of Broadcom’s director nominees are also disqualified from standing for election as directors of Qualcomm. ‘the company will reconvene its 2018 Annual Meeting of Stockholders on the earliest possible date. Stockholders of record on January 8, 2018 will be entitled to vote at the meetin
