IT capital raise at 5-month high as equity offerings surge, Broadcom issues debt

Capital markets activity in the North American information technology sector jumped to $11.20 billion in July, the largest amount in five months, as Broadcom Inc. launched billion-dollar debt offerings and common equity offerings surged.

By comparison, the sector raised $4.32 billion in June 2024 and $914.2 million in July 2023, according to S&P Global Market Intelligence data.

Common equity offerings comprised more than half of July's capital activity with $5.69 billion, the highest monthly total so far in 2024. About $5.50 billion came from debt offerings, while preferred security offerings accounted for $420,000.

Broadcom raised $5.00 billion from three concurrent senior debt offerings worth $2.25 billion, $1.50 billion and $1.25 billion. The chipmaker expected net proceeds of about $4.98 billion, which it intends to use for general corporate purposes and to refinance a portion of the loans that it used to fund the acquisition of VMware LLC.

The offerings came as Broadcom shifted its focus to AI in line with rising industry demand and investor enthusiasm for the technology. The company is reportedly working with Beijing ByteDance Technology Co. Ltd. to build an advanced AI processor to help enable a stable chip supply for the TikTok Inc. parent.

BofA Securities Inc., BNP Paribas Securities Corp., HSBC Securities (USA) Inc., Barclays Capital Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, TD Securities (USA) LLC and Wells Fargo Securities LLC were the underwriters for the Broadcom offerings.

– Find out how private equity buyouts drove a surge in North American infotech M&A value in July. – Read S&P Capital IQ Pro's latest coverage of European infotech M&A activity. – Run a custom screen of capital offerings by industry or geography on our Transactions Statistics page.

The biggest capital offering in July was QXO Inc.'s $3.50 billion private placement of common stock and warrants, completed July 19.

Business application software reseller QXO sold 340,932,212 shares of common stock at $9.14 per share, or $3.12 billion in total, and 42.0 million prefunded warrants at $9.14 per warrant, or an aggregate of $383.9 million, to certain institutional and accredited investors.

QXO separately completed a private placement of 67,833,699 shares of common stock at $9.14 per share, raising an aggregate of $620.0 million. The total includes a $150.0 million investment from A Fin Management LLC. A Fin Management's founder and CEO, Jared Kushner, joined the QXO board as an independent director.

Goldman Sachs Group Inc. and Morgan Stanley were the lead agents for the private placements, which, together with the $1.00 billion equity investment raised in June, brought QXO's total cash pile to about $5.1 billion. The company intends to use the investments' proceeds for acquisitions to expand its business.

QXO's $3.50 billion private placement now tops the list of biggest infotech capital offerings year to date. The Broadcom offerings also made it to the roster, joining multiple debt offerings from Cisco Systems Inc. and Super Micro Computer Inc.

Turning to capital raises by subsector, the Broadcom offerings helped semiconductor companies lead the rankings with $16.54 billion. Communications equipment companies dropped to second place after raising $14.86 billion, followed closely by application software companies with $14.29 billion.