IBM said on Monday it will acquire cloud software company Apptio from Vista Equity Partners for $4.6 billion in cash, in the latest deal to bolster its capabilities in cloud and automation.
Shares of IBM were marginally lower in premarket trading.
IBM said it will finance the transaction with cash on hand and expects the deal to close in the latter half of 2023.
The deal comes at a time when companies are cutting their technology budgets amid challenging macro conditions. IBM cut about 3,900 jobs early this year and reported under 1% year-over-year increase in revenue in the March quarter.
The acquisition of Apptio, which has over 1,500 customers and partnerships with cloud companies from Amazon.com’s AWS to Salesforce, will benefit IBM’s Red Hat business, AI portfolio and its consulting business, the technology giant said in a statement.
The deal marks the latest move by IBM as the century-old IT technology major reorients itself to focus on newer AI and cloud-based offerings.
In 2019, IBM bought software provider Red Hat for about $34 billion, in its biggest acquisition ever, and two years later spun off its IT infrastructure and data-center business Kyndryl Holdings. Last year, the company closed the sale of some of its healthcare-data and analytics assets.
Founded in 2007, Seattle-based Apptio helps companies manage and understand their spending on cloud services and offers functionalities such as IT budgeting, forecasting and financial analyses.
Private equity firm Vista Equity Partners agreed to pay about $2 billion for Apptio in 2018, which was over double its market cap at the time. Apptio went public in September 2016 at $16 per share.
First Published: Jun 26 2023 | 5:22 PM IST