IBM Corp. said yesterday that it agreed to buy Cognos Inc.
for nearly $5 billion, The Boston Globe reports.
Cognos Inc. is a Canadian software company having its U.S. base in Burlington.
The purchase will help IBM to expand in the market for
business intelligence software.
The software helps companies extract data and present it on
digital formats. The deal is expected to be completed in the first quarter of
2008.
IBM, with base in Armonk,
N.Y., will have to pay $58 a share
in cash for Cognos, 9.5 percent more than the closing price on Friday.
Cognos took over in Westborough in September by purchasing
Applix Inc., an analytic software. The company has its corporate offices in Ottawa, Canada,
390 employs in Massachusetts
and 90 in the operaion in Westborough.
Paul Hamerman, vice president for enterprise applications at
Forrester Research said: “It’s a very complementary acquisition for IBM.”
He added that IBM focused until now on infrastructure
programs rather than application software.
On Monday Cognos’ shares jumped $4.17, or 7.9 percent, to
$57.15 in Nasdaq while IBM’s shares increased on the New York Stock Exchange
$1.20, or 1.2 percent, to $101.
Steve Mills, IBM senior vice president and software group
executive said in an interview: “We certainly intend to grow the Cognos brand
globally, but it’s hard to say right now where that growth will land,” The
Boston Globe quotes.
IBM, the second largest software company in the world,
acquired in 1995 Lotus Development Corp. of Cambridge for $3 billion and ever
since then it has purchased another eight software companies in the Bay State,
like Rational Software Corp. and Ascential Corp.
The company announced in August that it will consolidate its
state software operations in a campus of 800,000 square feet, near Interstate
495
Cognos hasn’t got research and development in the state. Apparently
the senior management team will remain in Ottawa
in order to report back to the information management software division of IBM.
For the employees in Massachusetts
no plan has been drawn yet.
According to Gartner Inc., the technology research firm, business
intelligence software is expected to reach $5.2 billion in 2007, an increase of
12 percent from last year.
