- In this analysis, we analyzed Broadcom’s planned acquisition of VMware expected to be completed by FY2023.
- We expect the acquisition to enable the company to leverage VMware’s common enterprise customer base and estimated revenue synergies of $1.9 bln and revenue contribution of 32%.
- Moreover, we forecasted VMware’s operating margins to reach 34.1% by 2025 based on its guided EBITDA target of $8.5 bln within 3 years post-acquisition completion.
- In terms of its financial impact, we expect the deal to weigh on Broadcom’s cash flows in FY2023 with an FCF margin of -34.7% and debt to increase by 65% but reduce its WACC to 7.4% post-acquisition.
For further details see:
Broadcom: Acquisition Of VMware Provides 32% Revenue Boost