Broadcom Secures Funding For Symantec Deal: Report

Broadcom sees annual synergy potential of $1.5 billion in a deal that would value Symantec at more than $22 billion including debt, according to a Bloomberg report.

Broadcom has received lending commitments from several banks and identified $1.5 billion of annual synergy potential from the acquisition of Symantec, according to a Bloomberg report.

The San Jose, Calif.-based semiconductor manufacturer could value Mountain View, Calif.-based cybersecurity giant Symantec at more than $22 billion including debt, Bloomberg reported late Sunday, citing people familiar with the matter. An agreement could be reached around mid-July, Bloomberg reported, though the talks could also drag on or fall apart.

But Broadcom might not be Symantec's only suitor, Bloomberg said. Former Symantec CEO Greg Clark has teamed up with Boston-based buyout firm Advent International and London-based Permira Holdings in an effort to draw up a competing bid for Symantec, according to Bloomberg.

[Related: Partners: Broadcom-Symantec Deal Would Be 'Such A Strange Fit']

However, the group has thus far been unable to compete on price with Broadcom, which Bloomberg said makes its pursuit a long shot. Symantec and Advent declined to comment to CRN, while Broadcom, Clark, and Permira didn't immediately respond to request for comment.

Symantec's stock is up 4.3 percent, or $1.07 per share, to $26.15 per share in pre-market trading Monday, while Broadcom's stock is down 0.6 percent, or $1.66 per share, to $281 per share in pre-market trading.

Since Bloomberg first reported the takeover talks Tuesday evening, Symantec stock's has climbed nearly 18 percent from $22.10 per share, while Broadcom's stock has fallen 4.9 percent from $295.33 per share.

Partners told CRN last week that they don't see many advantages in bringing Broadcom and Symantec together under one roof. One solution provider said the technologies offered by the two companies are very different and don't provide for many natural adjacencies or synergies.

"I had no idea a chipmaker would make a play for an internet security company," the channel partner said. "I don't see much in the way of advantages to this. We're not in the chip distribution business."

A takeover of Symantec would come less than a year after Broadcom made its first foray into software with the $18.9 billion acquisition of CA Technologies. That deal spurred some investors to express concern that Broadcom CEO Hock Tan's acquisition strategy was being stretched too far, according to Bloomberg.

The CA Technologies transaction came after Broadcom dropped its $117 billion bid to buy rival chipmaker Qualcomm, which was scuttled after President Donald Trump blocked the deal due to national security concerns.

The last 14 months have been tumultuous for Symantec, culminating in the sudden May 2019 resignation of Clark from all roles effective immediately. Since then, Symantec has been led on an interim basis by former Novellus Systems Chairman and CEO Richard Hill.

A Broadcom-Symantec deal would be the second marriage between a chipmaker and an anti-virus vendor this decade, coming eight years after Intel purchased top Symantec competitor McAfee for $7.7 billion. The anticipated synergies never materialized, and Intel ended up spinning off McAfee to private equity firm TPG in a 2016 sale that value the business at $4.2 billion.