We’ve seen a surge in multi-billion dollar M&A deals this year, and KKR has added to this trend by announcing its acquisition of Broadcom’s end user computing business for $4 billion. This includes VMware Workspace One and VMware Horizon, two remote desktop applications that were previously part of VMware’s product portfolio. The deal, which was initially revealed in May 2022, has finally concluded after clearing all regulatory hurdles in November 2023.
Key Takeaway
KKR’s acquisition of VMware’s end user computing business from Broadcom for $4 billion reflects the ongoing trend of significant M&A activity in the tech industry. The deal underscores the strategic realignment of companies and the focus on core capabilities amidst a rapidly evolving market landscape.
Cost Cutting Measures and Strategic Focus
Following Broadcom’s $61 billion acquisition of VMware last year, the company has been seeking to offset some of the hefty purchase price. This has led to aggressive cost-cutting measures, including laying off over 2000 VMware employees and discontinuing 56 products. The decision to divest the end user computing pieces aligns with Broadcom’s strategic focus on core capabilities and shedding non-essential assets.
Empowering the EUC Division
During the pandemic, remote desktop tools like Workspace One and Horizon played a crucial role in enabling remote work. KKR’s managing director, Bradley Brown, envisions significant growth opportunities for the EUC division. Brown emphasized the potential to build a vibrant standalone business by investing in product innovation, customer excellence, and strategic partnerships.
Employee Ownership Program
Notably, KKR plans to introduce an employee ownership program, allowing employees to have equity in the new company alongside KKR. This move underscores KKR’s commitment to fostering a sense of ownership and alignment among the workforce. The deal is anticipated to be finalized later this year, pending standard regulatory approval.
