Monster Merger: IBM Buys SPSS For Approx. $1.2 Billion In Cash Deal
Tuesday, July 28, 2009; 4:18 AM
IBM is buying analytics software and solutions provider SPSS in an all cash transaction at a price of $50/share - a 42 percent premium to Monday's closing price of $35.09 on Nasdaq - resulting in a total cash consideration in the merger of approximately $1.2 billion. The acquisition is subject to SPSS shareholder approval, regulatory clearances and other closing conditions, and is expected to close later in the second half of 2009.
Big Blue said the acquisition of the publicly-held Chicago company was expected to strengthen its information-agenda initiative, which helps companies take information and turn it into a strategic asset. IBM shares fell 67 cent to $116.96 in pre-market trading, while SPSS shares jumped 41 percent to $49.59.
A message from SPSS Chairman, CEO & President Jack Noonan:
We and IBM view this as a highly-complementary move from both a technology and a market position perspective.We?re excited about this agreement and the positive prospects that SPSS and IBM can achieve together in continuing to lead an industry that we helped shape. The depth and breadth of IBM's resources, its customer and market reach can only enhance our ability to address the growing market for Predictive Analytics. In joining with IBM, we will advance Predictive Analytics as a competitive advantage for companies and organizations worldwide. We see this as a transformative event that will accelerate the adoption of Predictive Analytics. Between now and the acquisition close, we will continue to support our customers and partners in normal fashion. Existing contracts will remain in effect, account relationships and support infrastructure will remain unchanged.
Predictive analytics software captures and analyzes data about people?s attributes, attitudes and behaviors to gain a full understanding of anticipated future behaviors, so companies can make smarter decisions for improved business outcomes.
IBM says it will continue to support and enhance SPSS technologies while allowing customers to take advantage of its own product portfolio. SPSS will become part of the Information Management division within the Software Group business unit, led by Ambuj Goyal, General Manager, IBM Information Management.
Update - In other news: IBM also acquired Ounce Labs, a provider of enterprise source code security testing and intends to integrate it into its Rational software business. Financial terms were not disclosed.