Broadcom $5.5 billion acquisition of Brocade

Overview:

• Singapore-based Broadcom has acquired US network gear maker Brocade Communications in a $5.5 billion deal.
• The acquisition closely follows the largest deal for a chip maker ever, between Qualcomm and NXP Semiconductors.
• Broadcom will fund the acquisition with a combination of cash and debt, and plans to divest Brocade's IP networking business.
• The debt financing consisted of a $4 billion, four-tranche offering of $750 million 2.2% notes, $1 billion 2.65% notes, $1 billion 3.125% notes and $1.25 billion 3.5% notes. 
• The initial purchasers on the offering were BofA Merrill Lynch, JP Morgan Securities, Citigroup Global Markets and Wells Fargo Securities. 
• The deal is expected to close in the second half of 2017.

Kurt Stumpo - Journalist