IBM to spend $1.4 Billion to acquire Sterling
By siliconindia   |   Tuesday, 25 May 2010, 14:53 IST
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Bangalore: IBM has signed a contract to pay $1.4 billion to acquire business software integrator Sterling Commerce from AT&T, according to a report by Lance Whitney of Cnet news. The acquisition is the latest in a huge shopping spree on the part of Big Blue. Over the past year, IBM's acquisitions have included cloud provider Cast Iron, enterprise software maker Lomabardi, database security firm Guardium and data analytics company Exeros. Dublin, Ohio-based Sterling provides products designed to help companies more easily share information from different business systems with partners, customers, and suppliers. Sterling has about 18,000 customers worldwide spread across financial services, retail, manufacturing, communications, and distribution, according to IBM. "This acquisition will give IBM new tools to help clients build dynamic business networks that connect partners, suppliers, and clients and deliver a consistent customer experience across channels," Craig Hayman, General Manager of WebSphere at IBM, said in a statement. IBM added that it will continue to support Sterling's current customers and further develop Sterling's technologies to take advantage of IBM's existing products. IBM and AT&T expect the all-cash deal to be completed in the second half of 2010, subject to regulatory approval and closing conditions. Sterling's 2,500 employees will join the WebSphere division within IBM's Software Group. AT&T, when it was SBC, bought Sterling more than 10 years ago for $3.9 billion-considerably more than IBM's purchase price. However, an AT&T representative told that the company considered the transaction fairly valued and that selling it is the right decision for AT&T from a business perspective. Over the past few years and now with the new deal, AT&T has recouped most of its investment in Sterling, the representative said. AT&T expects to record a one-time pretax gain of around $750 million for the quarter in which the transaction closes. In the past 3-4 years, the company has spent about $12 billion for acquisitions. It has acquired more than 55 companies since 2003.

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