KKR to acquire Broadcom’s end-user computing division for $4bn

In a significant move within the technology sector, KKR & Co. Inc. announced today its acquisition of the End-User Computing Division (EUC Division) from Broadcom Inc. (NASDAQ: AVGO), in a deal valued at approximately $4 billion. This strategic acquisition marks a pivotal step for the EUC Division, enabling it to operate as a standalone company poised for enhanced growth and innovation in the digital workspace arena.

The EUC Division, formerly a part of VMware before being acquired by Broadcom, is renowned for its comprehensive suite of digital workspace solutions. These solutions empower organizations to securely manage and deliver applications, desktops, and data across various devices and platforms. Its flagship products, Horizon and Workspace ONE, stand out as leading solutions in desktop and application virtualization and Unified Endpoint Management (UEM) for enterprises, respectively. The division leverages cutting-edge data and intelligence to enhance scale, speed, and efficiency in modern digital workspaces.

Bradley Brown, Managing Director at KKR, highlighted the division’s leadership in providing seamless and secure digital workspaces, emphasizing the potential for growth by investing in product innovation and building strategic partnerships. Shankar Iyer, Senior Vice President and General Manager of the EUC Division at Broadcom, expressed confidence in the acquisition, foreseeing significant opportunities and benefits for customers, partners, and employees. Iyer will continue to lead the division, ensuring continuity and focus on customer relationships, expanded R&D, and strategic partnerships.

KKR plans to bolster the standalone company’s market position through significant investments across go-to-market functions, aiming for long-term customer success, partner support, and an expanded dedicated sales team. The investment, primarily through KKR’s North America Fund XIII, is subject to customary closing conditions and regulatory approvals, with an anticipated closure in 2024.

The transaction also includes the implementation of KKR’s broad-based employee ownership program, underscoring the belief in employee engagement and ownership culture as key to building stronger companies. This approach has historically resulted in substantial equity value for employees across KKR’s portfolio companies.

Financial advisement for the transaction was provided by Evercore, Deutsche Bank Securities Inc., and Jefferies LLC for KKR, with legal advisement from Simpson Thacher & Bartlett LLP. Citi acted as the exclusive financial advisor to Broadcom.

As the digital workspace continues to evolve rapidly, the EUC Division’s leading platforms, Workspace ONE and Horizon, are increasingly chosen by top enterprises worldwide. This acquisition by KKR is poised to further empower the division, enabling it to focus exclusively on delivering powerful tools for the digital workspace, thereby fostering innovation and customer-centricity in a fast-growing market.

This acquisition by KKR represents a strategic move to leverage the EUC Division’s strong foundation in digital workspace solutions and accelerate its growth and innovation. By operating as a standalone company with focused investments in R&D and customer success, the division is well-positioned to meet the evolving needs of the modern workforce and capitalize on the expanding market for digital workspace solutions. The deal underscores the value of specialized divisions within large tech conglomerates and highlights the trend towards specialization and strategic investments in high-growth potential areas within the technology sector.