BOSTON — In hopes of keeping pace with rivals in the field of "business intelligence" software, IBM (IBM) said Monday it plans to buy Cognos (COGN) for $5 billion in cash.
The acquisition would follow similar moves this year. Software giant SAP recently linked up with Business Objects and Oracle grabbed Hyperion Solutions. Cognos shares had soared recently on expectations that it would be acquired.
However, the head of IBM's software group, Steve Mills, said acquiring Cognos — which already had a business partnership with IBM — was not inspired by the previous deals. IBM has been on an acquisition tear in recent years to build out its software portfolio and improve the company's profit margins.
"We never do acquisitions on defensive moves or based on what others are doing," Mills said in an interview.
IBM is offering to pay $58 a share in cash for Ottawa-based Cognos, a 9% premium over Cognos' $52.98 closing price Friday. Cognos was trading in the mid-$40s before SAP's $7 billion proposal for Business Objects was announced in October, accelerating expectations for consolidation in business-intelligence software.
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Business-intelligence software helps big organizations gather and analyze data from across their organizations, whether for marketing, determining the financial impact of strategic decisions or making staffing changes.
IBM said Cognos' portfolio will fit its information management software division. Cognos CEO Rob Ashe is expected to remain and report to the group's head Ambuj Goyal, after the deal is completed in the first quarter 2008.
Cognos has 4,000 employees worldwide and serves more than 25,000 customers. It has U.S. headquarters in Burlington, Mass.
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