ESSENTIAL NOTES
- Software AG of Europe's AI and hybrid cloud offerings will be acquired by IBM for a sum of $2.3 billion.
- Silver Lake, a private equity firm, owns ninety-three percent of the German software company.
- It is anticipated that the transaction will be finished in 2024's second quarter.
To improve its cloud computing and artificial intelligence capabilities, International Business Machines Corp. (IBM) announced on Monday that it would acquire Software AG's enterprise integration platforms for 2.13 billion euros ($2.33 billion).
The StreamSets and webMethods platforms from Software AG, which together comprise the company's "Super Ipaas" division and serve 1,500 clients globally, will be acquired by IBM. It is anticipated that the all-cash transaction will close by 2024's second quarter.
IBM stated that the acquisition will expand Watsonx's data ingesting capabilities and is a part of their strategy to improve their AI and hybrid cloud offerings through strategic M&A deals. IBM referenced IDC research indicating that the global market for integration software is expected to surpass $18.0 billion by 2027, growing at a compound annual growth rate of 16%.
According to IBM Senior Vice President Rob Thomas, "this potent combination helps drive innovation while preparing businesses for AI, no matter where applications or data reside."
Private equity firm Silver Lake owns 93.3% of Software AG. The company has been pursuing a takeover for months and has announced a simultaneous delisting offer for Software AG at a price of 32 euros ($34.96) per share.
Although IBM's stock is down slightly this year, it is still up almost 15% as of Monday morning.
