IBM to Buy Ascential for $1.1 Billion

NEW YORK (Reuters)—IBM Corp. has agreed to buy software maker Ascential Software Corp. for $1.1 billion to bolster its information integration business, the companies said on Monday.

The deal values Ascential at $18.50 a share, an 18 percent premium to its closing price of $15.70 on the Nasdaq on Friday.

Ascential shares jumped to $18.35 in pre-open trading.

Ascential, based in Westboro, Mass., provides systems that help companies integrate complex data to streamline operations.

Armonk, New York-based IBM said the acquisition would complement and strengthen its information integration business, a unit that produced triple-digit growth in 2004.

"Information integration is an important enabler of an on-demand business strategy, and customers are increasing their investments in software that allows them to rapidly analyze, consolidate and extract value from the business data," IBM software executive Steve Mills said.

Once the deal is completed, Ascential's operations will be established as a business unit within IBM's information management software division.

IBM said it will offer Ascential employees jobs within the company, and is evaluating where in the unit it will place Ascential's executives and management.

Ascential grew rapidly in 2004, with revenue rising 46 percent to $271.9 million and more than 3,000 customers and partners across all major industries.

The acquisition, which is expected to close in the second quarter, is subject to approval by Ascential shareholders and regulatory authorities.

Copyright © 2005 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in The Channel Insider.