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July 3, 2019 
martin wolf Transaction Analysis
 
Broadcom in Advanced Talks to Acquire Symantec


Financial Information
  • N/A
Transaction Facts
  • Early today, Bloomberg reported that chipmaker Broadcom Inc. is in advanced talks to buy cybersecurity firm Symantec Corp., and that a deal could be reached within weeks. 
  • Symantec's shares rose 14 percent today, its biggest intraday gain in eight months. Shares closed at $25.21, up from $22.10 the previous day. Symantec traded over 40 million shares, which is more than 6x its average volume of 6.6 million shares per day. 
  • Broadcom's shares closed down 3.5 percent. There were approximately 5 million shares traded today, up 1.5x its average volume of 3.3 million. 
martin wolf  Analysis
  • On the Heels of Hostile: This reported acquisition comes on the heels of its abandoned hostile pursuit of rival chipmaker Qualcomm Inc, when Donald Trump blocked the transaction citing national security risks. The Qualcomm acquisition would have doubled down on its strategy to focus on chips, PCs, mobile, gaming, crypto, etc., a strategy that wasn't seeing much forward momentum.Image result for symantec logo
  • Shift in Strategy: If completed, this acquisition is a shift in Broadcom's M&A strategy from its proposed acquisition of Qualcomm. This acquisition closely resembles the $18 billion takeover of CA Technologies last year, that caused some concern among investors. While the market reacted negatively to the news, Broadcom's investment in the software sector changed course with its shares rising and market cap growing. 
  • Not as much of a Rush to the ExitThe share price dropped precipitously,  approximately 20 percent to $197, after the Broadcom-CA Technologies deal was announced almost a year ago on July 11, with about 50 million shares traded. After today's news, investors didn't rush to the exit as they did last year. It was only a 3.5 percent decline. With such a relatively small decline, maybe it's a sign that the market will be more patient with another non-traditional acquisition. 
martin wolf  is not the advisor in this reported transaction.

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Headquartered in Scottsdale, Arizona with an office in New York, martinwolf is a leading M&A Advisory focused on middle market companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed more than 160 transactions in over 20 countries and sold eight divisions of Fortune 500 companies. 

 

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