California semiconductor maker Broadcom Inc. has agreed to acquire CA Technologies for about $18.9 billion in cash, the companies announced after Wednesday’s market close.
CA, a business software maker formerly known as Computer Associates, moved its headquarters to Manhattan in 2014 but still employs about 1,000 of its 11,000 workers at the site of its former headquarters in Islandia.
CA has a lease on the Islandia building through August 2021.
The company, co-founded by Charles Wang and Russell Artzt in New York City in the 1970s, was one of Long Island’s iconic corporations, an image tarnished by a $2.2 billion accounting scandal that led to a prison sentence for former chief executive Sanjay Kumar in 2006.
In a news release, Broadcom and CA valued the deal at about $44.50 per CA share, a 20 percent premium to the stock’s closing price on Wednesday.
Shares of CA closed Wednesday at $37.21, up 0.2 percent, but climbed about 16 percent in after-hours trading to $43.04.
“We are excited to have reached this definitive agreement with Broadcom,” Mike Gregoire, CA’s chief executive, said in a statement. “This combination aligns our expertise in software with Broadcom’s leadership in the semiconductor industry.”
CA posted revenue for the fiscal year ended March 31 of $4.2 billion, a 5 percent increase over the previous year. Broadcom reported revenue of $17.6 billion for the fiscal year ended Oct. 29.
Broadcom said it plans to fund the transaction with cash on hand and $18 billion in debt financing.
Hock Tan, president and CEO of Broadcom, said the transaction will create “one of the world’s leading infrastructure technology companies.”
“With its sizable installed base of customers, CA is uniquely positioned across the growing and fragmented infrastructure software market,” he said, “and its mainframe and enterprise software franchises will add to our portfolio of mission critical technology businesses.”
The transaction, already approved by the boards of directors of both companies, requires approval from CA shareholders and antitrust regulators in Washington, the European Union and Japan.
Careal Property Group AG, based in Zurich, and affiliates, which collectively own about 25 percent of CA’s common stock, have agreed to support the deal, which is expected to close in the fourth quarter of this year.
In March a bid by Broadcom to acquire rival Qualcomm Inc. was blocked by the U.S. federal government on national security grounds. Broadcom, formerly based in Singapore, moved its headquarters to San Jose, California, in April.