Broadcom Shares Surge 6.53% Amid Strategic Move Post-CA Acquisition

On November 6th, Broadcom (AVGO) shares increased by 3.25%, continuing a two-day rally with a total gain of 6.53%. This reflects growing investor confidence following the completion of its $19.8 billion acquisition of CA Technologies on November 5th. Post-acquisition, Broadcom promptly announced a deal to sell CA’s DevOps security testing enterprise, Veracode, to Thoma Bravo, a private equity firm, for $950 million.

Veracode was initially acquired by CA in 2017 for $614 million, serving as a SaaS platform that enables DevOps teams to detect software security vulnerabilities. This divestiture comes amid Broadcom's efforts to streamline its focus post-CA acquisition, as it continues to align its business strategy with its core operations.

The integration of CA into Broadcom's operations has led to strategic personnel shifts, with former CA executives Greg Lotko and Ashok Reddy transitioning into senior roles at Broadcom. Lotko assumes the position of Senior Vice President and General Manager of the Mainframe Division, while Reddy becomes the Senior Vice President and General Manager of the Enterprise Software Division.

Broadcom is positioning CA as a major player in the mainframe software market, reportedly showcasing the company’s ability to handle approximately 30 billion transactions daily and process $7 trillion in credit card payments annually. This strategic positioning is critical as Broadcom expands its footprint and leverages CA's established relationships with numerous mid-sized enterprises and service providers.

In the fast-evolving tech landscape, Broadcom’s focus on mainframe and enterprise software through CA represents a calculated move to enhance its service offerings and reinforce its market position. The acquisition aligns with Broadcom’s broader strategy to fortify its technology portfolio, enabling it to cater to a diverse range of enterprise clients through innovative solutions.