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Broadcom, backed by Michael Dell and Silver Lake, to buy VMware; TA backs Apex Group

Broadcom is acquiring VMware for $61 billion.

Good morning, dealmakers. MK Flynn here with the Wire.

It’s another busy day for M&A.

Big software deal. Broadcom is buying VMware, which is backed by Michael Dell and Silver Lake, for $61 billion.

“Building upon our proven track record of successful M&A, this transaction combines our leading semiconductor and infrastructure software businesses with an iconic pioneer and innovator in enterprise software, as we reimagine what we can deliver to customers as a leading infrastructure technology company,” CEO Hock Tan said.

The deal “marks the biggest bet yet that the boom in enterprise software demand will endure despite the economic tumult—and that bundling disparate offerings of low-profile products can yield outsize returns,” says the Wall Street Journal. Tan “built Broadcom into a microchip powerhouse by acquiring makers of a host of unsexy-but-essential components, then cutting costs and leveraging the company’s growing pricing power. He is now banking that the same model will work in corporate software.”

Assuming the transaction closes – and it’s been approved by the boards of both companies – the deal will be one of the largest tech transactions ever, behind Microsoft’s pending $69 billion purchase of Activision and Dell’s 2016 acquisition of EMC for $67 billion.

Enterprise software acquisitions have dominated private equity dealmaking of late, with Thoma Bravo’s $12.3 billion purchase of cybersecurity developer Proofpoint and its $10.2 billion acquisition of real estate software developer RealPage closing last year. More recently, the San Francisco firm completed its purchase of Bottomline Technologies, a fintech company specializing in payments, for $2.6 billion earlier this month.

Financial services provider Apex Group in bringing aboard new strategic minority investors led by TA Associates and including Mubadala Investment Company and Carlyle. They are investing alongside existing investor Genstar Capital, and founder and CEO Peter Hughes and the Apex management team.

Apex offers a wide range of services, including fund services, digital onboarding and bank accounts, depositary, custody and super ManCo services, business services including HR and payroll and a pioneering ESG ratings and advisory service for private companies.
Since the 2017 backing of Genstar, Apex has grown both organically and through strategic acquisitions. Earlier this month, Apex announced the purchase of Maitland, an international fund services provider. Including recently announced acquisitions, Apex has increased its assets under administration from $50 billion to $2.75 trillion, according to the company.

For sale. Wendy’s chairman Nelson Peltz and his management fund Trian Partners are exploring a potential sale of the restaurant business and other options to increase shareholder value, according to an SEC filing Tuesday.

Wendy’s issued a response, saying the board will “carefully review any proposal submitted by Trian Partners.”

“As demonstrated by our recent first quarter results, we continue to make meaningful progress against our three strategic growth pillars, reinforcing the strength and resiliency of the Wendy’s brand and driving robust AUV and sales increases. We remain focused on achieving our vision of becoming the world’s most thriving and beloved restaurant brand.”

Greenwashing. “As investor interest in ESG soars across the globe, the SEC has moved toward adopting a rule that would mandate advisers and fund managers make new disclosures so as to counter so-called ‘greenwashing’ — funds exaggerating their sustainable offerings to lure in all of that cash,” writes Regulatory Compliance Watch publisher Carl Ayers.

“In a split, 3-1 vote, commissioners May 25th approved a new proposed rule that would mandate new Form ADV brochure disclosures and other filings—all designed to clearly inform investors what they’d really get by way of their ESG investments,” Carl reports.

For more, see the story.

That’s all for now. I’ll be back tomorrow to close out the week before the Memorial Day holiday.

Cheers,

MK