International Business Machines Corp. (IBM) announced that it has acquired privately held Intelliden Inc., an automation technology company. Financial terms of the acquisition were not disclosed.
Intelliden is a leading provider of intelligent network automation software that helps telecommunications companies configure, manage and scale their networks. Intelliden is a venture formed by firms such as London-based 3i, Granite Global Ventures and Matrix Partners.
The acquisition of Intelliden will enable IBM to help clients improve network service availability, decrease risk through compliance reporting and improve staff efficiency.
The acquisition is expected to further strengthen IBM’s service management portfolio by offering comprehensive solutions for automation and optimization of digital and physical assets. The specific solutions include full-service lifecycle management of network devices, IT, data center and physical assets.
According to IBM, Intelliden’s intelligent network automation is an integral addition to IBM’s portfolio helping it to extend automation across all business and IT assets.
Intelliden’s technology will be integrated into IBM’s Tivoli Software which is a part of the IBM Software Group. Revenues from Tivoli software and infrastructure software increased 7.0% in 2009.
IBM reported improved revenue from its branded middleware products that include WebSphere, Information Management, Tivoli and Lotus products, which increased 6% year over year in the fourth quarter of 2009. As a result, the company’s Software segment increased 2% year over year in the quarter.
IBM’s plan is to generate EPS growth through a combination of revenue growth, net margin expansion, growth initiatives and acquisitions as well as effective capital deployment to fund growth and provide returns to shareholders through dividends and common stock repurchases.
Thus acquisition of Intelliden will support both IBM’s acquisition strategy and capital allocation model, and will contribute to the achievement of the company’s objective for EPS.
IBM has been building its portfolio with strategic acquisitions each year. Since 2003, IBM has closed more than 50 acquisitions in the Software segment. IBM expects the majority of its software revenue growth to come from internal investments and targeted acquisitions.
We remain positive on the company’s acquisition spree, which will drive growth moving forward.
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