Broadcom To Acquire Brocade In $5.9 Bln Deal; Updates Q4 Revenue Guidance

(RTTNews) - Broadcom Limited (AVGO) and Brocade Communications Systems, Inc. (BRCD) announced they have entered into a definitive agreement under which Broadcom will acquire Brocade for $12.75 per share in an all-cash transaction valued at approximately $5.5 billion, plus $0.4 billion of net debt. The transaction is expected to be immediately accretive to Broadcom's non-GAAP free cash flow and earnings per share. Broadcom currently anticipates that Brocade's FC SAN business will contribute approximately $900 million of pro forma non-GAAP EBITDA in its fiscal year 2018.

Separately, Broadcom Limited affirmed its fourth quarter 2016 non-GAAP guidance originally provided on September 1, 2016, and tightened revenue outlook based on current business trends and conditions. Non-GAAP net revenue for the fourth quarter is now expected to be between $4.10 billion to $4.175 billion, compared to the previously provided range of $4.025 billion to $4.175 billion.