SAS Institute decides not to sell to Broadcom

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Broadcom wanted to acquire SAS Institute, but negotiations have fallen through after the institute’s founders changed their minds about the sale. In a report by the Wall Street Journal, people familiar with the matter said that the companies were discussing a deal that would value SAS anywhere from $15 to $20 billion, including debt.

After the WSJ report, Jim Goodnight and John Sall, co-founders of SAS and still at the helm of the company, changed their minds and decided not to sell to Broadcom. It is not clear if another buyer for SAS may show up and could have more success.

An unlikely union

SAS employees thought that Broadcom, an efficiency-driven company, was not very suitable as a new owner. SAS is known for having a unique culture, with a sprawling campus in North Carolina, featuring amenities like a yoga studio and a disc golf course.

SAS sells analytics, business intelligence, and data management software to enterprises. The company’s roots go as far back as the 60s when universities teamed up to analyze agricultural data using a program called Statistical Analysis System.

Broadcom, which has built itself through acquisitions, is a semiconductor giant that has been hunting for deals to pad its corporate software portfolio.

Broadcom’s acquisitions

In recent years, Broadcom has been on an acquisition spree, aimed at making it a big player in business software. It acquired CA technologies (infrastructure software developer) for $18.9 billion in late 2018, Symantec (cybersecurity vendor) for $10.7 billion in late 2019, and Brocade Communications (storage network specialist) for $5.5 billion in 2017.

Had the deal gone through, it would have been finalized in the next few weeks. At the moment, Broadcom has a market capitalization of almost $200 billion. The privately-held SAS Institute said earlier this year that its 2020 revenue was about $3 billion.