Broadcom Talks to Buy SAS Institute Collapse: Report

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Broadcom was reportedly successful talks to wage betwixt $15 and $20 cardinal for SAS Institute.

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Broadcom ‘s talks to get endeavor bundle institution SAS Institute person collapsed, The Wall Street Journal reported precocious Tuesday.

Broadcom (ticker: AVGO) banal ticked down little than 0.2% successful the extended session. Shares closed Tuesday’s regular league with a 0.4% diminution to $484.01.

Semiconductor and endeavor bundle institution Broadcom was successful talks to wage betwixt $15 cardinal and $20 cardinal for the North Carolina-based SAS, the Journal reported connected Monday. But a time aft the talks were archetypal reported, co-founders Jim Goodnight and John Sall had a alteration of bosom and opted to termination the imaginable Broadcom deal, according to unnamed sources cited by the Journal.

Broadcom didn’t instantly respond to a petition for comment. SAS declined to comment.

An acquisition ample capable to marque a dent successful Broadcom’s fiscal statements volition beryllium a continuing situation for the company. There aren’t galore imaginable targets that are some ample capable to impact Broadcom’s concern and inexpensive capable to marque a woody worthwhile for executives and shareholders, Charles Lemonides, main concern serviceman astatine ValueWorks, told Barron’s. 

“We’re astatine a infinitesimal erstwhile tech companies are afloat priced, and Broadcom has been built done acquisitions,” Lemonides said. “It’s going to beryllium hard to support that level moving forward.”

At the reported terms of $15 cardinal to $20 billion, SAS would person a worth of roughly 5 to 6.7 times the company’s 2020 revenue, according to Barron’s analysis.

Broadcom has built a important information of its concern done acquisitions nether the enactment of main enforcement Hock Tan. In 2015, Broadcom’s endeavor bundle limb took disconnected with the $37 cardinal merger of Avago and Broadcom.

Broadcom has continued its acquisitive behaviour successful caller years. After buying bundle CA Technologies for $19 cardinal successful 2018, Broadcom acquired Symantec‘s endeavor information concern for astir $10 billion. Broadcom besides made a failed bid for Qualcomm (QCOM) successful 2018 and bought Argon Design for $1 cardinal successful 2019.

Write to Max A. Cherney astatine max.cherney@barrons.com

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