Computer giant IBM is to acquire SPSS for around $1.2 billion. The deal should close later this year, subject to shareholder approval, regulatory clearances and other conditions.
IBM will pay all-cash at a price of $50/share for Chicago-based SPSS, which it says will form a major plank of its burgeoning Information on Demand (IOD) software portfolio and business analytics capabilities, including its recently-announced Business Analytics and Optimization Consulting organization, with some 4,000 consultants, and its network of Analytics Solution Centers. The deal represents a 42% premium on SPSS's closing stock price yesterday.
Big Blue quotes analysts IDC who estimate that the worldwide market for business analytics software will grow by 4% to $25 billion this year. The firm says the moves reflect 'growing client needs to cut costs, reduce risk, and increase profitability'.
IBM says the combination of its own analytics capability with SPSS's portfolio of Predictive Analytics Software products (PASW) means that clients will be able to identify which customers to target, how to reach them, when to make contact and the most appropriate action to take. It also cites examples from police services and political campaigns as innovative use of the technology. SPSS will be integrated within IBM's Information Management software portfolio but the buyer says it will continue to support and enhance SPSS technologies while allowing customers to take advantage of the broader IBM portfolio.
'With this acquisition, we are extending our capabilities around a new level of analytics that not only provides clients with greater insight - but true foresight' according to Ambuj Goyal, IBM's General Manager, Information Management. 'Predictive analytics can help clients move beyond the 'sense and respond' mode, which can leave blind spots for strategic information in today's fast paced environment -- to 'predict and act' for improved business outcomes.'
IBM also announced today the launch of its Smart Analytics System, a combination of hardware and software that will help clients to analyze structured and unstructured data from multiple sources to forecast business trends. This uses business intelligence, data mining, text analysis and data warehousing software, some of it from the earlier acquisitions of Cognos and Ascential Software. IBM has made about 80 acquisitions in hardware, software and services since CEO Sam Palmisano took the reins in 2002.
Web sites: www.ibm.com and www.spss.com .
All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.