On Monday, IBM announced its intention to acquire Software AG’s enterprise integration platforms for a total of 2.13 billion euros ($2.33 billion). This strategic move aims to enhance IBM’s capabilities in artificial intelligence and hybrid cloud services. The U.S. technology giant said it would pay cash to acquire Germany-based Software’s StreamSets and webMethods platforms. StreamSets provides a cloud-native DataOps and data ingestion platform that helps enterprises achieve consistent access to data from different sources and types. At the same time, webMethods is an integration and API management solution. The two units formed Software AG’s so-called “Super Ipaas” business, launched in October. IBM will acquire the businesses with available cash on hand, it added. The deal, subject to customary closing conditions and regulatory approvals, is expected to close in the second quarter of 2024.
The move is part of IBM’s larger strategy to invest in AI and hybrid cloud, a theme it has pursued through several acquisitions over the last several years. The purchase also reflects the growing importance of application and data integration in driving digital transformations. “The combination of StreamSets and webMethods will provide IBM with leading technologies in this area,” Chief Executive Officer Ginny Rometty said in a statement.
Founded in 1969, Software AG develops enterprise software for business process management and integration. Its customers include automotive companies, consumer packaged goods companies, and utility companies. The company’s Super Ipaas platform enables clients to integrate anything, anywhere, and anyway they want with advanced features and more than 550 prebuilt connectors.
Software AG’s StreamSets and webMethods divisions are expected to enhance IBM’s existing AI and hybrid cloud capabilities portfolio, including its Watsonx artificial intelligence platform and its Red Hat and IT automation products. The company said the two companies’ combined customer base will span 175 countries.
The transaction is expected to close in the second quarter of next year and will be accretive to earnings per share in 2024. StreamSets and webMethods are expected to contribute to that growth and the company’s investment in its AI research and development team. The acquisition comes a day after IBM reported its first quarterly profit in three years. A surge helped the results in demand for the company’s cloud computing and business analytics services. Its central hardware systems unit also saw a rebound in sales, although it missed forecasts. On Monday, IBM’s shares were up 0.16% at $110.78 in New York trading. The stock has risen 17% this year. It trades at a discount to its peers, including Apple and Facebook.