Armonk, N.Y. and Ottawa - IBM and Cognos have entered into a definitive agreement for IBM to acquire Cognos, a publicly held company based in Ottawa, in an all-cash transaction at a price of approximately $5 billion or $58 per share, with a net transaction value of $4.9 billion. The acquisition is subject to Cognos shareholder approval, regulatory approvals and other customary closing conditions. It is expected to close in the first quarter of 2008.The acquisition of Cognos supports IBM's Information on Demand strategy, a cross-company initiative announced on Feb. 16, 2006 that combines IBM's strength in information integration, content and data management and business consulting services to unlock the business value of information, according to IBM. Integrating Cognos, the 23rd IBM acquisition in support of its Information on Demand strategy, will enable new business insights to be delivered to a broader set of people across an organization, beyond the traditional users of business intelligence.
IBM says the acquisition fits squarely within both its acquisition strategy and capital allocation model, and that it will contribute to the achievement of the company's objective for earnings-per-share growth through 2010.
"Customers are demanding complete solutions, not piece parts, to enable real-time decision making," says Steve Mills, senior VP and group executive, IBM Software Group. "IBM has been providing business intelligence solutions for decades. Our broad set of capabilities—from data warehousing to information integration and analytics—together with Cognos, position us well for the changing business intelligence and performance management industry. We chose Cognos because of its industry-leading technology that is based on open standards, which complements IBM's service-oriented architecture strategy."
Together, IBM and Cognos will deliver an open standards-based platform with a broad range of expertise to help companies expand the value of their information, optimize their business processes and maximize performance across their enterprises.
Cognos provides a business intelligence (BI) and performance management platform, fully integrated on an open-standards-based service-oriented architecture (SOA), and has a history of supporting heterogeneous application environments, consistent with IBM's approach. With Cognos, customers can turn data into actionable insight for coordinated, information-driven decision-making to improve overall performance. Cognos will also extend IBM's reach further into the CFO office with powerful financial planning and consolidation capabilities, according to IBM.
"This is an exciting combination for our customers, partners and employees. It provides us with the ability to expand our vision as the leading BI and performance management provider," says Rob Ashe, president and CEO, Cognos. "IBM is a perfect complement to our strategy, with minimal overlap in products, a broad range of technology synergies, and the resources, reach and world-class services to accelerate this vision. Furthermore, this combination enables Cognos customers to leverage a broader set of solutions from IBM to advance their information management driven initiatives."
Following completion of the acquisition, IBM intends to integrate Cognos as a group within IBM's Information Management Software division, focused on BI and performance management. IBM also will appoint current Cognos President and CEO, Rob Ashe, to lead the group, reporting directly to GM, Ambuj Goyal.
Other strategic acquisitions in support of IBM's Information on Demand initiative include Princeton Softech (data archiving and compliance), FileNet (enterprise content management), Ascential Software (information integration), DataMirror (changed data capture), SRD (entity analytics), Trigo (product information management), DWL (customer information management) and Alphablox (analytics).
In the second half of 2006, Insurance Networking News reported IBM's acquisition of Austin, Texas-based Webify Solutions, an Austin, Texas-based, privately held provider of industry-specific software and services for building SOA and FileNet Corp., a publicly held company headquartered in Costa Mesa, Calif.
Webify provides industry-specific, pre-built standards-based accelerators, tools and frameworks, and its offerings are designed to help solve business problems that are specific to a given industry such as HIPAA compliance for healthcare companies and ACORD standards in the insurance industry.
FileNet is a provider of business process and content management solutions. This acquisition builds upon IBM's Information on Demand initiative, launched in February 2006, to address the growing market opportunity around combining IBM's software, services, partners and industry consulting to improve clients' business performance. The Information on Demand strategy aims to provide clients with data exactly when and how they need it to improve their business processes, quickly respond to market needs and rapidly identify new business opportunities.
At the time of the FileNet acquisition announcement, Donald Light, senior analyst at Celent LLC, a Boston-based research and advisory firm said, "This is basically good news for the insurance industry, which is facing increasing demands from regulators, customers and business partners to manage content, documents and processes consistently and transparently. FileNet's already significant position in the insurance industry will get a big boost from Big Blue's dominant position in insurance data centers."
In December 2005, IBM announced its acquisition of Bowstreet, a Tewksbury, Mass., provider of tools and technologies that help companies bring together corporate applications, documents, databases and enterprise information into a single, integrated portal application. The technology can be used to more create, customize, deploy and maintain portlets that leverage existing enterprise applications, databases and other IT assets, including IBM Lotus Domino, SAP, PeopleSoft and Web Services for SOA portlets. And as part of its information on demand strategy, the company reported last October the acquisition of DataPower, a Cambridge, Mass., technology company that provides enterprises with intelligent XML-Aware network infrastructure to ensure performance, security and manageability of next-generation applications and XML Web Services.
Sources: IBM and INN archives
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access