IBM to buy FileNet for $1.6bn; gets edge over EMC
International Business Machines (IBM) on Thursday said it agreed to buy business software maker FileNet for $1.6bn, a move that would boost its competitive edge against EMC in the market for corporate content management.
By Agencies |
NEW YORK: International Business Machines (IBM) on Thursday said it agreed to buy business software maker FileNet for $1.6bn, a move that would boost its competitive edge against EMC in the market for corporate content management.
The all-cash deal is the third software-related acquisition that IBM, the world’s largest IT company, has announced in a week. IBM is trying to boost profit margins in its services business, which accounts for about half of revenue, by selling sophisticated software that can be replicated across companies and industries.
It said it entered into a definitive agreement to buy FileNet at $35 per share, which would be a 1% premium over FileNet’s Wednesday closing price of $34.65 on Nasdaq.
IBM said it expects the all-cash deal to close in Q4, subject to shareholder and regulatory approval. Software led growth at IBM in the second quarter, helped by strong sales of IBM’s Websphere “middle-ware” used by businesses to connect different software components.
The acquisition would put IBM in a stronger position to compete with rival EMC in the market for enterprise content management software, or programs that corporations use to manage text documents along with images, audio, video files.
IBM has made about 40 acquisitions in the past three years, and has said it plans further deals in software and services. Last week, IBM said it agreed to buy MRO Software for $740m in cash and bought privately held Webify Solutions for an undisclosed amount to expand in the fast-growing market for integrating corporate software systems.
IBM’s software group had a gross margin of 84% in Q2, compared with 26% in services and 34% in hardware, according to its financial reports. IBM said on Thursday it planned to combine FileNet’s operations with its content management business.
The all-cash deal is the third software-related acquisition that IBM, the world’s largest IT company, has announced in a week. IBM is trying to boost profit margins in its services business, which accounts for about half of revenue, by selling sophisticated software that can be replicated across companies and industries.
It said it entered into a definitive agreement to buy FileNet at $35 per share, which would be a 1% premium over FileNet’s Wednesday closing price of $34.65 on Nasdaq.
IBM said it expects the all-cash deal to close in Q4, subject to shareholder and regulatory approval. Software led growth at IBM in the second quarter, helped by strong sales of IBM’s Websphere “middle-ware” used by businesses to connect different software components.
The acquisition would put IBM in a stronger position to compete with rival EMC in the market for enterprise content management software, or programs that corporations use to manage text documents along with images, audio, video files.
IBM has made about 40 acquisitions in the past three years, and has said it plans further deals in software and services. Last week, IBM said it agreed to buy MRO Software for $740m in cash and bought privately held Webify Solutions for an undisclosed amount to expand in the fast-growing market for integrating corporate software systems.
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IBM’s software group had a gross margin of 84% in Q2, compared with 26% in services and 34% in hardware, according to its financial reports. IBM said on Thursday it planned to combine FileNet’s operations with its content management business.
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