IBM yesterday said it will buy data analytics company Netezza for $1.7bn (£1.1bn) in a bid to expand its technology services business.
It hopes the acquisition will help its clients more expertly analyse market information as it shifts its focus from computer hardware to higher-margin software and services.
The deal values Netezza at $27 per share, a 9.8 per cent premium from Friday’s closing price of $24.60.
Analysts are now speculating a rival bidder could emerge, pushing the price up even higher.
Massachusetts-based Netezza sells appliances that combine analytical software and hardware to clients such as online dating site eHarmony and financial exchange operator NYSE Euronext.
IBM said the speed of Netezza’s technology had convinced it to buy the company. The two are currently partners, with Netezza using IBM hardware.
Arvind Krishna, general manager of information management at IBM, said analytics, which accounted for about $9bn of IBM’s $95.8bn in revenue last year, was a significant growth opportunity for the company.
IBM said in May it planned to spend about $20bn in acquisitions through 2015 to expand
its software and services business. The firms said they expect the deal to close in the fourth quarter. The deal includes a termination fee of $56m, according to a regulatory filing.
The agreement also comes amid a resurgence in mergers and acquisitions activity. Last month saw an unseasonable burst of deal making, with data showing announced deals totaled $262bn, the highest for an August since 1999.
Analysts have said this could continue, helped by low interest rates, record cash holdings and low stock market values, with ambitious firms striving to become one-stop shops selling everything from networking and servers to software and services.