IBM to buy Software AG's cloud computing and AI assets for $2.3 billion

Takeaways

IBM will pay $2.3 billion to acquire European company Software AG's AI and hybrid cloud offerings.
The company German software company is 93.3% owned by private equity firm Silver Lake.
The transaction is expected to close in the second quarter of 2024.

International Business Machines Corp. (IBM) announced Monday that it will buy Software AG's enterprise integration platforms for 2.13 billion euros ($2.33 billion) to strengthen its capabilities. artificial intelligence and cloud computing.

IBM will acquire Software AG's StreamSets and webMethods platforms, which make up its “Super Ipaas” business, used by 1,500 customers worldwide. The all-cash transaction is expected to be completed by the second quarter of 2024.

IBM said the deal is part of a goal to enhance its AI and hybrid cloud offerings through strategic M&A deals, and will add to capabilities watsonx data ingestion. IBM cited an IDC study that predicts the global integration software market will exceed $18.0 billion in 2027, with a compound annual growth rate of 16%.

'This powerful combination helps drive innovation while preparing businesses for AI, regardless of where applications or data resides,' said Rob Thomas, senior vice president at IBM.

Software AG is owned at 93 .3% by private equity firm Silver Lake, which has been involved in takeover proceedings for months and announced a simultaneous delisting offer for Software AG at 32 euros ($34.96) per share.

IBM shares were in slight drop Monday morning but are up almost 15% per year – to date.