IBM has announced a definitive agreement to acquire StreamSets and webMethods from Software AG for €2.13 billion in cash. These platforms are part of Software AG’s Super iPaaS enterprise technology, offering application and data integration solutions. This acquisition is a significant move in IBM’s focus on AI and hybrid cloud capabilities.
About IBM
IBM, a global leader in hybrid cloud and AI, assists clients across 175 countries. It specializes in data insights, streamlining processes, and providing competitive edge through innovations in AI, quantum computing, and cloud solutions. IBM’s emphasis on trust, transparency, and inclusivity has been a cornerstone of its long-standing reputation.
Market trends & significance
The integration software market is expected to surpass $18.0 billion by 2027, with a CAGR of 16.1%. StreamSets and webMethods are leaders in this rapidly growing field. They offer cloud-native DataOps, data ingestion platforms, and integration and API management solutions. Rob Thomas, IBM’s Senior VP, Software and Chief Commercial Officer, emphasized the acquisition’s role in enhancing clients’ application and data potential.
Streamsets & webmethods: a closer look
StreamSets provides consistent data access and delivery across diverse sources, aiding smart data pipeline design. webMethods, on the other hand, delivers B2B integration, managed file transfer, and API management, serving over 1,500 clients globally. These platforms have shown profitable growth with significant recurring revenue.
Software AG’s strategic moves
Software AG, Germany’s second-largest software company, recently combined two divisions to form Super iPaaS. This move was intended to launch a new growth phase. Post-acquisition, Software AG plans to concentrate on its high-performance database product, Adabas & Natural.
Silver Lake’s involvement
Silver Lake, owning 93% of Software AG’s shares, aims to delist the company next year. The private equity firm first invested in Software AG in 2021 with €344 million. Their acquisition decision followed after outbidding US group Bain Capital for Software AG in May.
Future prospects & completion timeline
The acquisition will integrate StreamSets and webMethods with IBM’s existing portfolio, including watsonx and Red Hat. This synergy is anticipated to drive innovation in hybrid cloud and AI solutions. The transaction, subject to regulatory approvals, is expected to be completed by the second quarter of 2024. Post-sale, Software AG will focus on its database divisions, boasting a 70% profit margin. In the last year, Software AG reported €958.2 million in sales and an operating profit of €178.5 million.
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