IBM shops north

IBM officials in Armonk last week said the company has agreed to pay about $5 billion in cash to acquire a leading Canadian business software company.

The purchase of Cognos, a publicly held company based in Ottawa, supports IBM’s information on demand strategy, a two-year-old cross-company initiative to unlock the business value of information. Cognos is the 23^rd company acquired by IBM in support of its strategy.

IBM officials said the integration of Cognos will enable new business insights to be delivered to a broader set of people across an organization, beyond the traditional users of business intelligence.

Company officials said the pending merger will make IBM and Cognos the leading provider of technology and services for business intelligence and performance management, delivering the industry”™s most complete, open-standards-based platform with the broadest range of expertise to help companies expand the value of their information, optimize their business processes and maximize performance across their enterprises.

“Customers are demanding complete solutions, not piece parts, to enable real-time decision- making,” said Steve Mills, IBM software group senior vice president and group executive. He said Cognos was chosen because its industry-leading technology complements IBM”™s business intelligence solutions strategy.

IBM officials said the Armonk-based company will provide broader reach for Cognos solutions across multiple industries and geographies with a more complete set of offerings, including consulting services, hardware and other middleware software. Cognos in turn will further extend IBM”™s reach into the chief financial officer”™s office with powerful financial-planning and consolidation capabilities.

Cognos President and CEO Rob Ashe, who will head the Cognos group within IBM”™s information management software division, called the merger “an exciting combination for our customers, partners and employees. It provides us with the ability to expand our vision as the leading business intelligence and performance management provider. IBM is a perfect complement to our strategy, with minimal overlap in products, a broad range of technology synergies, and the resources, reach and world-class services to accelerate this vision.”

Cognos has about 4,000 employees worldwide and serves more than 25,000 customers. The Canadian company has partnered with IBM for more than 15 years, with many joint customers that include the New York City Police Department, Canadian Tire and MetLife.

The acquisition is subject to Cognos shareholder approval, regulatory approvals and other customary closing conditions. It is expected to close in the first quarter of 2008.