IBM to acquire Software AG’s Integration Business for $2.3 billion to boost its hybrid cloud and AI offerings 

IBM announced on Monday it would acquire Software AG’s enterprise integration platforms, StreamSets and webMethods, for €2.13 billion ($2.33 billion). This strategic move is aimed at strengthening IBM’s presence in the hybrid cloud and artificial intelligence (AI) markets.

StreamSets and webMethods, constituting Software AG’s “Super Ipaas” business launched in October, are platforms that offer application integration, API management, and data integration services, among other functionalities, Reuters reported.

This marks IBM’s second major acquisition in under six months. As we reported back in June, IBM acquired the technology spend-management platform Apptio from Vista Equity Partners. The deal, valued at $4.6 billion, was a strategic move to strengthen IBM’s capabilities in cloud computing and automation.

This acquisition enhances IBM’s hybrid cloud and AI offerings, potentially positioning it as a formidable competitor to industry giants like Microsoft and Amazon Web Services (AWS). IBM, already owning the data quality platform InfoSphere Information Server, sees StreamSets as a valuable addition, providing data quality management within the integration process.

These platforms play a crucial role in helping businesses connect and integrate data across cloud and on-premise environments, a vital component for effective hybrid cloud strategies. Moreover, they can be instrumental in preparing data for AI applications.

Software AG, majority-owned by private equity firm Silver Lake with a 93.3% stake, underwent a takeover pursued by Silver Lake over several months, valuing the entire business at €2.6 billion ($2.84 billion).

“The opportunity to bring the StreamSets and webMethods teams together with IBM to innovate in building the future of hybrid cloud and next-generation AI solutions for the enterprise is uniquely compelling,” Christian Lucas, chairman of the supervisory board of Software AG said in a statement.

The completion of the transaction is contingent on regulatory approvals and is anticipated in the second quarter of 2024. Simultaneously, Silver Lake announced a delisting offer for Software AG at €32 ($34.96) per share, marking the next expected step in the aftermath of its takeover earlier in the year.