Broadcom to sell End User Compute EUC division for $3.8 billion to KKR

There is breaking news on the acquisition of Broadcom’s VMware End User Compute (EUC) business by private equity firm KKR for $3.8 billion. It is a strategic move by Broadcom that could have implications for the Virtual Desktop Infrastructure (VDI) sector. Broadcom's decision to divest the EUC segment, valued at approximately $1 billion, following its $69 billion acquisition of VMware, reflects a strategic realignment and focus on core competencies.

This development, as reported by Reuters, is noteworthy for several reasons. Firstly, KKR's interest in the VMware EUC business is aligned with its existing portfolio, notably its ownership of Alludo, which encompasses virtualization software such as Parallels. The synergy between Alludo's offerings and VMware’s EUC solutions suggests a potential for creating a consolidated platform that enhances where, when, and how people work, leveraging virtualization technologies.

A senior executive from a VDI software company, preferring anonymity, articulated that KKR acquiring the EUC business would be beneficial for the industry, emphasizing that uncertainty surrounding VMware's EUC business and the broader VDI market is counterproductive. The executive posits that KKR's stewardship could usher in a period of investment and innovation, potentially transforming the acquired entity into a dominant force within the EUC landscape.

The comparison with Vista Equity Partners’ acquisition of Citrix for $16.5 billion in 2022 underscores the perceived value and strategic fit of the VMware EUC business within KKR's portfolio. The acquisition is seen as a favorable deal for KKR, given the comprehensive technology stack that the EUC business offers for not only deploying virtualized desktops and applications but also for managing a diverse array of devices. This move is viewed as a positive development for stakeholders across the board, including employees, customers, and partners, providing a stable and growth-oriented platform for the EUC solutions.

The acquisition represents a strategic alignment and potential growth opportunity for KKR, leveraging its existing assets to strengthen the VMware EUC business. It highlights the evolving dynamics within the VDI and EUC sectors, where consolidation and investment can drive innovation, stability, and expansion. The outcome of this acquisition could indeed set a new benchmark for the industry, emphasizing the importance of strategic acquisitions in fostering technological advancements and market leadership.

Read the story on Reuters:

https://www.reuters.com/technology/broadcom-nears-38-bln-sale-remote-access-unit-kkr-2024-02-24/