Broadcom Looks to Sell Remote Access Unit for $3.8B

Chipmaker Broadcom is reportedly nearing a $3.8 billion deal to sell its remote access unit that allows users to access desktops and applications from any device to private equity firm KKR, in a move aimed at streamlining its portfolio after completing its massive acquisition of VMware late last year.

According to sources familiar with the matter, Broadcom has been seeking buyers for its end-user computing division since December as part of its efforts to optimize its business after the VMware acquisition. KKR is said to have prevailed in an auction that also included bids from firms like EQT. If finalized, the deal could be announced as early as Monday.

The potential sale of the remote access unit represents Broadcom’s bid to focus more intently on its core semiconductor operations following the VMware takeover. With the $69 billion VMware deal now in the books, CEO Hock Tan is looking to streamline the combined company by divesting non-essential assets and businesses. The end-user computing division, while profitable, appears to be seen as less central to Broadcom’s long-term strategic priorities in the chip space.

KKR No Stranger to Software Dealmaking

KKR is an experienced buyer in the enterprise software sector, having previously acquired companies like BMC Software for $8.5 billion in 2018. If this deal goes through, it will mark another sizable acquisition by the private equity giant in an area where it has demonstrated capabilities in integrating acquisitions and managing software businesses. Evercore, Deutsche Bank and Jefferies are representing KKR in negotiations, while Citigroup is advising Broadcom. A successful sale would allow Broadcom to further focus its vast resources on the semiconductor market following its landmark VMware acquisition.

While the companies have not confirmed the deal, sources say an announcement could come as early as Monday. Such a transaction would see Broadcom divest a non-core asset to streamline operations after a major acquisition, and provide KKR another opportunity to expand its software portfolio through prudent dealmaking. Only an official announcement will determine if the two reach an agreement on valuing the remote access business at the reported $3.8 billion price tag.