(Bloomberg) — International Business Machines Corp. announced that it has agreed to acquire HashiCorp Inc. in a transaction that values the software company at $6.4 billion on an enterprise basis.
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IBM will pay $35 per share for San Francisco-based HashiCorp, according to a statement Wednesday confirming an earlier Bloomberg News report.
The announcement coincided with IBM reporting its first-quarter results, which included a 1% increase in revenue to $14.5 billion from the same period last year. Free cash flow was $1.9 billion, about $600 million more than a year earlier.
Shares of HashiCorp rose as much as 11% on Wednesday, continuing gains from Tuesday, as reports emerged that IBM was in advanced talks to acquire the company. HashiCorp closed in New York up 7.8% to $31.41, giving the company a market value of $6.27 billion.
“HashiCorp has a proven track record of enabling customers to manage the complexity of today’s infrastructure and application proliferation,” IBM Chairman and Chief Executive Officer Arvind Krishna said in the statement. “Combining IBM’s portfolio and expertise with HashiCorp’s capabilities and talent creates a comprehensive hybrid cloud platform designed for the AI era.”
HashiCorp’s software helps companies across industries build their digital infrastructure in the cloud, which can reduce costs and accelerate the time it takes to bring products to market. A deal for HashiCorp would strengthen IBM’s focus on hybrid cloud and “appears to be a good strategic fit,” Bloomberg Intelligence senior analyst Anurag Rana wrote on Tuesday.
IBM’s biggest acquisition to date remains the $34 billion acquisition of Red Hat in 2019. That software company has become a concern among investors in recent quarters as growth has slowed to single digits, relatively sluggish for a unit that once regularly rose more than 10%. 20% every quarter.
(Updates with explanation in second paragraph.)
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