IBM Continues Buying Spree With Algorithmics Acquisition

http://www.crn.com/news/applications-os/231600618/ibm-continues-buying-spree-with-algorithmics-acquisition.htm;jsessionid=oOXLWysrIVGY+PV1s-9u8w**.ecappj01

by rickdale • 15 years ago

8 5 15 years ago

crn.com

moonlighter• 15 years ago

IBM has been on a buying spree for years, mostly driven by Steven Mills from their software group. They are actually very smart about it; they acquire most companies early on when they are still comparatively cheap. They usually buy them not because they need to for competitive pressure but to shape or build out future offerings, avoiding having to pay a premium later on.

fireismyflag• 15 years ago

Who else thought the article was about IBM using algorithms to buy in the stock market?

mathattack2• 15 years ago

The price seems very cheap for a software firm: just over double revenue. With risk management being so important for banks now, I am surprised. Are they more of a consulting firm with software attached?

phaet0n• 15 years ago

Major US firms seemingly have a good run of acquiring smaller innovative Canadian companies at bargain prices: http://www.techvibes.com/blog/2011-tech-acquisition-tracker-...

I think it may point to the difficulty of getting financing beyond a certain threshold.

mathattack2• 15 years ago

Seems like it sold at ~ 20x EBITDA and a little over 2x sales. Expensive by the first metric; cheap by the second. Revenue is ~180k per employee - low for an established company.

The weak EBITDA makes or tough buy for a PE firm, who might not be able to make interest payments on the debt required for a purchase.

This is much less of an issue for IBM who would pay in cash.

I see IBM making half the employees redundant an then pushing the product through their existing sales network.

Not a bad deal for them, though it might make Algo a tougher place to work.

IBM Continues Buying Spree With Algorithmics Acquisition

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