IBM has announced its intention to acquire HashiCorp, a multi-cloud infrastructure automation company, for $35 per share in cash, with an enterprise value of $6.4 billion. The acquisition aligns with IBM’s focus on expanding its hybrid cloud and AI capabilities. HashiCorp’s products are widely used for managing infrastructure as code, automating application deployment, enhancing security, and improving cloud infrastructure operations.
International Business Machines (IBM) has announced the acquisition of HashiCorp for $6.4 billion. This move aims to expand IBM’s cloud-based software products to meet the growing demand for AI-powered services. Software has emerged as a key focus area for IBM, especially amid cautious spending in its consulting business due to rising interest rates. The acquisition will further strengthen IBM’s cloud capabilities, which have become increasingly crucial for storing and processing the vast data used in AI programs.
IBM has agreed to acquire cloud software provider HashiCorp for $35 per share in cash, valuing the deal at $6.4 billion net of cash. The acquisition is expected to be accretive to IBM’s earnings and cash flow in the future. However, IBM’s first-quarter revenue fell short of analysts’ estimates, marking the third revenue miss in the past five quarters. Revenue from software, consulting, and infrastructure services all came in below expectations, despite an increase in overall revenue of around 1.5% year-over-year. IBM shares dipped 3% in extended trading after the announcement.
Cloud infrastructure automation platform HashiCorp’s shares surged 10% after reports emerged that tech giant IBM is finalizing a deal to acquire the company. Sources indicate a deal could be reached as early as Wednesday, April 24, 2024. This corroborates an earlier report from the Wall Street Journal suggesting a potential deal between IBM and HashiCorp. However, BTIG analyst downgraded HashiCorp to Neutral due to uncertainty surrounding the deal’s completion and the typical approval and closing process, which could take six to nine months. Despite the news, HashiCorp’s shares are known for their volatility, with 19 moves greater than 5% over the past year. The stock’s biggest move in the past year was a 25.6% drop after the company reported first-quarter results that beat analysts’ estimates but lowered full-year guidance.
HashiCorp has been downgraded to Neutral from Buy by BTIG after its recent run-up following merger and acquisition speculation. While a deal with IBM remains uncertain, analysts at Bank of America Securities believe HashiCorp’s public cloud management suite could be a valuable addition to IBM’s software and cloud capabilities. The bank has increased its price target on HashiCorp to $32 from $28. A deal with IBM could be announced as early as today, as the company is scheduled to report its first-quarter results after the close of trading.
IBM is reportedly in discussions to acquire cloud software company Hashicorp Inc, sending its stock soaring by 22%. The potential deal, which could materialize within days, would bolster IBM’s cloud offerings and enhance Hashicorp’s market reach.
HashiCorp shares surged on Tuesday after media reports speculated about a potential acquisition by tech giant IBM. The cloud software provider’s stock climbed as much as 26% amid the buzz. HashiCorp’s services enable developers to manage infrastructure on public clouds operated by companies like Amazon and Microsoft.
International Business Machines (IBM) is in advanced discussions to acquire HashiCorp, a cloud software provider. The potential deal could value HashiCorp at around $6.1 billion, according to a source familiar with the matter. The talks are in their final stages and an agreement may be reached within the coming days. However, there is still a possibility that the negotiations might not lead to a transaction.
