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IBM buys HashiCorp for $6.4bn

Translate from : IBM køber HashiCorp for $6.4bn

IBM has announced its intention to buy HashiCorp in a deal valued at $6.4 billion. The move aims to strengthen IBM's cloud-based software offerings and capitalize on demand driven by the rapid expansion of artificial intelligence (AI) applications. IBM believes the acquisition of HashiCorp represents a strategic step toward enhancing its software capabilities and capitalizing on momentum in cloud-based solutions.

HashiCorp has more than 4,400 customers, including Bloomberg, Comcast, Deutsche Bank, GitHub, JP Morgan Chase, Starbucks and Vodafone. HashiCorp expects revenue of $643 - $647 million for fiscal year 2025.

"We are investing in initiatives to simplify our marketing, improve our product monetization and focus our business on the HashiCorp Cloud Platform in fiscal year 2025. These initiatives will help us re-accelerate our revenue growth in the new fiscal year," said Dave McJannet, CEO of HashiCorp , in its March earnings report.

HashiCorp's products have broad adoption in the developer community and are used by 85 percent of the Fortune 500. HashiCorp's infrastructure and security community products were downloaded more than 500 million times in HashiCorp's fiscal year 2024. IBM will pay $35 per share for HashiCorp, a significant 42.6 percent premium over Monday's closing price, according to a Reuters report.

IBM Chief Financial Officer Jim Kavanaugh said the uncertain macroeconomic environment has caused clients to tighten their discretionary spending, a trend that has also been reflected in the consulting sector. Competitors such as Accenture have also faced challenges, as evidenced by their downgraded revenue forecast for fiscal 2024 due to reduced client spending on consulting services.

However, IBM's software business saw growth of 5.5 percent in the first quarter, underscoring the company's commitment to the cloud business, especially in AI. The acquisition of HashiCorp is expected to be accretive to IBM's adjusted core earnings within the first full year after closing, which is expected to be the end of 2024.

Headquartered in California, HashiCorp specializes in helping clients establish and manage their cloud infrastructures, making it a strategic addition to IBM's portfolio. Stephen Elliot, a vice president at market research firm International Data Corp., praised the deal, noting that IBM is acquiring a leader in the field that complements its existing offerings.