Broadcom Ltd., a few days after President Donald Trump blocked what would have been the main deal in tech history, remains undaunted and may look for other companies to acquire, albeit for a smaller scale.
On Thursday, the Singapore-based technology conglomerate reported better-than-expected first-quarter earnings, as a consequence of huge growth in its wireless business, which surged 88%. The firm\’s conference call was its first with analysts since Trump the 2009 week blocked its seek to win seats on Qualcomm Inc.\’s board.
\”Although i am disappointed with this outcome, we shall comply with the order issued on Monday … in connection with the proposed transaction,\” said Tom Krause, Broadcom\’s chief financial officer.
Broadcom executives said we were holding moving on and that they continue to view M&A for a better way to drive shareholder returns, versus buying back stock or settling debt. \”If this view changes, feel comfortable, we will not hesitate to change our approach,\” Krause said.
Read also: How Broadcom vs. Qualcomm went from hostile deal to some Trump blockade.
? also said it remains on the right track to move its corporate headquarters towards the U.S., which it had wanted to as part of its acquisition last year of Brocade Communications, before its ill-fated make an attempt to buy Qualcomm
?. Its re-domiciliation to the U.S. is now expected to be completed following market closes on April 4. It really is hosting its annual meeting on April 4 and also a special meeting for stockholders to vote to the re-domiciliation on March 23.
Its status for a foreign company put its endeavor to buy Qualcomm under scrutiny through the Committee on Foreign Investment in the U.S., which declared the deal a potential national security risk. Qualcomm itself reportedly had sought a CFIUS review, just days before a shareholder vote it was actually likely to lose.
Krause said Qualcomm was clearly an exceptional and very large acquisition opportunity. \”Our future acquisitions less complicated more likely to be funded with cash seen on our balance sheet and without having to flex the balance sheet much beyond our current financial policy of two times net leverage,\” he said.
Still, executives did not give many hints about what other kinds of deals they would be looking at, even as analysts tried in several ways to get a sense of what kind of acquisitions the corporation would look for in the future.
\”What I will say to this is we\’re open, we\’re open, we\’re exposed to looking at anything that helps,\” said Hock Tan, Broadcom\’s us president. \”We\’ve obviously shown openness. We obviously did Brocade, which can be more of an appliance systems business, but very per our strategy, and will remain that way going forward.\”
The guessing games on Wall Street have begun, but as the Wall Street Journal reported Thursday, there is a limited number of companies that meet Broadcom\’s criteria of becoming leaders in their segments. Analysts have floated a few names, which include FPGA chip maker Xilinx Inc.
. RBC Capital Markets analyst Amit Daryanani wrote from a note to clients this week that he thinks its next deal \”is going to look like Brocade, which fit the M&A criteria but wasn\’t a \’classic semiconductor\’ company.\”
Once Broadcom achieves its status as the U.S. company, it\’s even feasible it may make another costly play for Qualcomm, although most analysts don\’t believe that will happen. For now, it\’s all set to go shopping again, this time with a smaller cart.