Zscaler chief executive Jay Chaudhry has rebuffed claims that the company is in discussions with Broadcom over a potential acquisition.
Chaudhry took to LinkedIn earlier this week to respond to online speculation suggesting Broadcom could swoop in on the security firm as part of a deal valued at $38 billion.
The initial speculation was sparked by reporting from a Substack account, dubbed ‘Cyber’s Substack’, which cited “people familiar with the discussions”.
Chaudhry hit back at the claims, stating on LinkedIn that the company is not currently entertaining offers.
“Rumors have been circulating in smaller trade publications and websites that Broadcom is in discussions to acquire Zscaler,” he wrote.
“I want to set the record straight that neither I nor the Zscaler board of directors are seeking or entertaining any offers to acquire Zscaler. Any reports stating otherwise, are untrue.”
Chaudhry added that Zscaler investors should refer to the company’s investors relations website, blogs, and SEC filings for official information on its activities.
“We encourage our investors and others to review the information we make public in these locations as such information could be deemed to be material information,” he said.
Cyber’s Substack said it stands by its reporting despite Chaudhry's comments.
Zscaler acquisition would mark latest major deal for Broadcom
Regardless of the speculation, an acquisition of Zscaler would mark the second major deal for Broadcom in as many years in the wake of its VMware purchase.
Things haven’t been smooth for Broadcom since the deal closed in October 2023, however. The company has since embarked on a comprehensive overhaul of VMware’s offerings, prompting criticism from both customers and industry stakeholders.
Zscaler’s Q2 2024 earnings reports show it performed well across the quarter, recording 35% revenue growth year-over-year to $525 million. The earnings results all came in above guidance, Chaudhry commented at the time.
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In March, Zscaler also announced the acquisition of Israeli cyber security startup, Avalor, for a reported $350 million.
Broadcom does have previous ties with Zscaler. In 2020, the zero trust specialist agreed to pay Broadcom $15 million to settle a lawsuit filed by Symantec which claimed Zscaler had infringed patents.
Symantec filed a lawsuit against the firm three months after Broadcom acquired the Symantec Enterprise Security business, and the settlement granted Zscaler "a patent license, release, and covenant not to sue."
