IBM to buy HashiCorp in $6.4 billion deal to expand in cloud
IBM to buy HashiCorp in $6.4 billion deal to expand in cloud
By Arsheeya Bajwa
April 25, 20243:09 AM GMT+5:30Updated 13 hours ago
GSMA's 2023 Mobile World Congress (MWC) in Barcelona
The International Business Machines Corporation (IBM) logo is displayed, during the GSMA's 2023 Mobile World Congress (MWC) in Barcelona, Spain March 1, 2023. REUTERS/Nacho Doce/File Photo Purchase Licensing Rights, opens new tab
April 24 (Reuters) - International Business Machines (IBM.N), opens new tab will buy HashiCorp (HCP.O), opens new tab in a deal valued at $6.4 billion, the company said on Wednesday, expanding its cloud-based software products to tap into an AI-powered boom in demand.
Software has been a bright spot for IBM as its consulting business grapples with more cautious spending by enterprises navigating higher interest rates.
IBM will pay $35 per share for HashiCorp, a 42.6% premium to Monday's closing price. HashiCorp's shares had surged on Tuesday following media reports of the deal talks.
HashiCorp's shares rose more than 4% in extended trading on Wednesday while IBM fell 7% as the company separately reported first-quarter revenue marginally below estimates.
Total revenue of $14.46 billion compared with LSEG estimates of $14.55 billion. Consulting segment sales were flat in the quarter.
"You're seeing clients in this uncertain macroeconomic environment. You're seeing clients that are tightening discretionary spending," CFO Jim Kavanaugh told Reuters.
Accenture (ACN.N), opens new tab had cut its fiscal-year 2024 revenue forecast in March as clients curbed spending on its consulting services.
Advertisement · Scroll to continue
Report this ad
IBM's software business grew 5.5% in the first quarter. The company has doubled down on its cloud business as it becomes increasingly necessary to store and process the vast amounts of data employed in artificial intelligence programs.
The Big Blue's "AI book of business" crossed $1 billion in the first quarter, growing sequentially. The book comprises actual sales and bookings from various offerings.
Advertisement · Scroll to continue
IBM outperforms S&P 500 on AI-fueled rally
IBM outperforms S&P 500 on AI-fueled rally
IBM said the HashiCorp acquisition would be funded by cash on hand and would add to adjusted core profit within the first full year of closing, expected by the end of 2024.
California-based HashiCorp allows customers to establish and manage their infrastructures on the cloud.
"This is a smart deal for IBM. They're buying a leader and it complements their existing portfolio," Stephen Elliot, a vice president at market research firm International Data Corp, said.
Advertisement · Scroll to continue
Report this ad
IBM reported adjusted earnings of $1.68 per share for the quarter ended March, compared to analysts' average estimate of $1.60.
Advertisement · Scroll to continue
Report this ad
Coming soon: Get the latest news and expert analysis about the state of the global economy with Reuters Econ World. Sign up here.
Reporting by Arsheeya Bajwa in Bengaluru; Editing by Sriraj Kalluvila
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Read Next
ANALYSIS
BHP's proposed bid for Anglo American is a big bet on copper
2:38 PM GMT+5:30
An aerial view of Anglo American's Los Bronces copper mine at Los Andes Mountain range, near Santiago city
Businesscategory
Hipgnosis' bidding war intensifies as Concord hikes offer for Shakira music owner
2:05 PM GMT+5:30
Hipgnosis logo is seen in front of a displayed stock graph
Dealscategory
3 South Korean budget airlines still in race for Asiana cargo unit, sources say
1:51 PM GMT+5:30
An Asiana Airlines Airbus A350-900 is seen at the Airbus delivery center in Colomiers near Toulouse
Commoditiescategory
BHP Group makes $38.8 bln play for Anglo American, copper in focus
12:19 PM GMT+5:30
An aerial view of Anglo American's Los Bronces copper mine at Los Andes Mountain range, near Santiago city
LSEG Workspace
Markets
A passerby walks past an electric monitor displaying recent movements of various stock prices outside a bank in Tokyo
Stocks and yen struggle as tech troubles weigh
Marketscategory · April 25, 2024 · 2:31 PM GMT+5:30
World stocks snapped a three-day winning streak on Thursday as disappointing forecasts from Facebook and Instagram parent Meta hammered tech, while the yen's drop through 155 per dollar for the first time since 1990 kept FX traders on intervention alert.
Marketscategory
South African rand little changed before producer inflation data
12:04 PM GMT+5:30
South African Rand coins are seen in this illustration picture
Marketscategory
Equities mixed as investors eye earnings; yen on intervention watch
2:58 AM GMT+5:30
A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City
Marketscategory
TSX loses winning streak as railroad shares slide
2:04 AM GMT+5:30
The facade of the original Toronto Stock Exchange building is seen in Toronto
Marketscategory
Has Wall Street peaked too early?
April 24, 2024
Threats to risk assets this year - JP Morgan investor survey
Site Index
Latest
Home
Authors
Topic sitemap
Media
Videos
, opens new tab
Pictures
Graphics
, opens new tab
Browse
World
Business
Markets
Sustainability
Legal
Breakingviews
Technology
Investigations
, opens new tab
Sports
Science
Lifestyle
About Reuters
About Reuters
, opens new tab
Careers
, opens new tab
Reuters News Agency
, opens new tab
Brand Attribution Guidelines
, opens new tab
Reuters Leadership
, opens new tab
Reuters Fact Check
, opens new tab
Reuters Diversity Report
, opens new tab
Stay Informed
Download the App (iOS)
, opens new tab
Download the App (Android)
, opens new tab
Newsletters
, opens new tab
Information you can trust
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Follow Us
Thomson Reuters Products
Westlaw, opens new tab
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
Onesource, opens new tab
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
Checkpoint, opens new tab
The industry leader for online information for tax, accounting and finance professionals.
LSEG Products
Workspace, opens new tab
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Data
Catalogue, opens new tab
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
World-Check, opens new tab
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
