IBM to Buy Informix Unit
siliconinvestor.com
NEW YORK (Reuters) - International Business Machines Corp. on Tuesday said it will pay $1 billion in cash to buy Informix Corp.'s database software business, bolstering IBM in its battle with rival software maker Oracle Corp.
Informix gives IBM, the No. 1 computer maker, one of the leading database systems used in so-called data warehousing, business intelligence and transaction-handling systems used by more than 100,000 customers, including phone companies Verizon Communications and Deutsche Telekom AG , retailer Sears , and air reservation system Sabre.
Armonk, N.Y.-based IBM is one of the two biggest makers of software used to manage massive corporate business operations, along with Oracle. Menlo Park, Calif.-based Informix, once a competitor to Oracle, fell on hard times in the mid-1990s.
"This clearly, I believe, will be viewed by Oracle as a shot across their bow," said Steve Mills, IBM senior vice president and head of the company's software division. "IBM competes extensively, and aggressively against Oracle across the market worldwide today."
The acquisition nearly doubles IBM's marketshare in database software that runs on Unix and Windows distributed systems, pushing it share to somewhere in the 20s, Mills said.
The additional marketshare clout will attract application vendors, to the systems integrators and other companies that play a role in the industry to tailor their products to IBM's database software. "So our substantial increase in size and customer base and resources will all contribute to us being an even more attractive provider and alternative to Oracle," Mills said.
The deal is the second largest that IBM's software division has made. In 1995, IBM bought Lotus Development Corp. for $3 million.
Once it completes the deal it will integrate Informix software into the IBM database system under General Manager Janet Perna, combine Informix's sales team with IBM's sales force and support existing Informix customers, IBM said.
"This acquisition of Informix allows IBM to bring the benefits of leadership database technologies to more customers faster," Sam Palmisano, IBM president and chief operating officer, said in a statement.
The deal is expected to close in the third quarter.
After the close of the deal, Informix will be renamed Ascential Software, reflecting the company's remaining database applications business.
Ascential Software will use the $800 million after-tax proceeds from the sale to fund the company's growth and will use a substantial portion, yet to be calculated, for a stock buy-back plan.
Ascential will begin its life with $1 billion in cash and no debt.
In early trading, shares of Informix, which reported first-quarter results that beat estimates but were below a year ago, were off $1.61, or 22 percent to $5.48. Shares of IBM rose $1.37, or 1.22 percent, to $113.37. |
