IBM to Buy Software AG's Cloud Computing and AI Assets for $2.3BN
IBM will acquire Software AG's enterprise integration platforms for $2.33 billion to strengthen its AI and cloud computing capabilities.
IBM to Acquire Software AG's Platforms
IBM has announced its plans to acquire Software AG's enterprise integration platforms, which include StreamSets and webMethods. These platforms, known as the "Super Ipaas" business, are used by 1,500 customers globally. The all-cash deal, valued at $2.33 billion, is expected to be finalized by the second quarter of 2024.
By acquiring Software AG's platforms, IBM aims to enhance its artificial intelligence (AI) and hybrid cloud offerings. The company believes that this strategic move will strengthen its data ingesting capabilities, particularly for its AI platform, WatsonX. According to research from IDC, the global integration software market is projected to reach over $18.0 billion by 2027, with a compound annual growth rate of 16%.
Rob Thomas, Senior Vice President at IBM, expressed that the combination of IBM and Software AG's platforms will drive innovation and enable businesses to leverage AI, regardless of the location of applications or data.
Software AG's Ownership and Delisting Offer
Software AG is currently 93.3% owned by private equity firm Silver Lake. Silver Lake has been pursuing a takeover of Software AG for several months and has recently announced a delisting offer for the company at a price of $34.96 per share.
The decision to acquire Software AG's platforms aligns with IBM's strategy to enhance its AI and cloud capabilities through strategic mergers and acquisitions. This move will further strengthen IBM's position in the market and enable it to better support its clients in their digital transformation journeys.
IBM's Performance in the Market
IBM shares experienced a slight decline on Monday morning, but have shown a year-to-date increase of nearly 15%. This acquisition is expected to contribute to IBM's growth and expansion in the AI and cloud computing sectors.
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