IBM to buy MRO software for $740m

BOSTON: International Business Machines Corp (IBM), the world’s biggest technology services company, said on Thursday that it has agreed to buy MRO Software Inc for $740m in cash as it expands its profitable software business. IBM said it would pay $25.8 per share for MRO, equivalent to a 19% premium on MRO’s Wednesday closing price on Nasdaq.

Based in Bedford, Massachusets, MRO provides software and consulting to help companies buy, maintain and retire assets such as production equipment, facilities, transportation and information technology hardware and software. IBM said it expects the deal to close in the fourth quarter, subject to regulatory and shareholder approvals.

IBM, of Armonk, New York, has made about 40 acquisitions in the past three years, including $2bn of purchases last year. On Wednesday, IBM said it had bought privately held Webify Solutions, which helps insurers, healthcare companies and banks integrate corporate software systems. Terms of the transaction were not disclosed.

IBM has said it sees additional acquisitions in software, its most profitable business, and services. IBM’s software group had a gross profit margin of 84% in the second quarter, compared with 26% in services and 34% in hardware, according to its financial statements.

IBM said MRO’s asset management technology and consulting services will be combined with IBM Software and IBM Global Services offerings.