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ERP Journal: Article

IBM Snaps Up Ascential for $1.1BN in Hard Cash

Acquisition, Once Approved by Ascential Shareholders and Regulators, Expected to Close in Q2

"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 their business data," said Steve Mills, senior vice president and group executive, IBM Software Group, as IBM announced this morning that it has entered into a definitive agreement to acquire a leading provider of enterprise data integration software, Ascential Software.

"This transaction offers Ascential Software shareholders solid appreciation over recent trading prices of our stock, without the execution and business risk," said Peter Gyenes, chairman and chief executive officer, Ascential Software.

"The acquisition of Ascential Software expands IBM's open information integration platform and strengthens our ability to help customers create an environment that delivers the data they need, in the right form, to the right location, and at the right time. That's the mark of an on demand business," Mills added.

IBM will acquire the equity of Ascential in an all cash transaction at a price of approximately $1.1 billion or $18.50 per share. The acquisition is subject to Ascential Software shareholder and regulatory approvals and other customary closing conditions, and is expected to close in the second quarter of 2005.

The acquisition complements and strengthens IBM's fast-growing information integration business, a key part of the company's information management efforts and a unit that produced triple-digit growth in 2004. Ascential Software also grew rapidly in 2004, with a reported 46% total revenue increase to $271.9 million.

In a statement the two companies said that the acquisition addresses a key customer challenge today - applying technology to respond much more quickly to changing market conditions:

"For example, some of the largest retailers use Ascential's software to gather, standardize and structure sales information from multiple channels (for example, Internet, catalogs, storefronts), providing a single view of vendors and customers from disparate systems, and make rapid inventory and pricing adjustments in response to changing market demands. Enabling customers to react and respond with speed to rapidly emerging business opportunities is an example of IBM's on demand business strategy."

Ascential Software's ability to quickly gather, move and enhance the quality of large amounts of data complements IBM's WebSphere Information Integrator product portfolio, the statement continued. "WebSphere Information Integrator software enables customers to centrally manage and access data that is stored across a variety of structured and unstructured sources, from IBM and non-IBM vendors, in real-time. This combination will help customers solve numerous integration problems. For example, a company trying to consolidate data from multiple ERP systems into a single system could leverage WebSphere Information Integrator to access various mainframe or distributed sources for profiling and assessment, and then use Ascential Software's data migration and transformation capabilities to integrate the data."

"The integration market is changing and evolving as customers demonstrate a preference for broad solutions that meet enterprise integration requirements," said Gyenes. "IBM shares our understanding that data integration is a strategic component of information and process integration and offered us this opportunity to combine and form a stronger competitor in the large and growing integration market."

According to IBM, once the acquisition is completed, it will:

  • Establish Ascential Software's operations as a business unit within IBM's Information Management software division led by General Manager Janet Perna.
  • Incorporate Ascential Software technology and solutions into IBM's Information Management and Software Group offerings.
  • Market and sell Ascential Software products through IBM's and Ascential Software's worldwide sales channels and Business Partners.
  • Build upon the companies' existing partnership, which includes more than 550 joint customers worldwide.

This acquisition, combined with IBM's middleware portfolio, strengthens IBM's leadership in key on demand initiatives such as business intelligence, business performance management, business transformation, multi-channel commerce, RFID, merger and acquisition consolidation, master data management and regulatory compliance.

The Ascential Software technology also furthers IBM?s commitment to open computing through its ability to support both IBM and non-IBM data sources, including those of Oracle, Microsoft and SAP.

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