IBM Acquires AT&T Subsidiary Sterling Commerce For $1.4 Billion
International Business Machines Corp. (NYSE:IBM) and AT&T announced today that they have reached a definitive agreement for IBM to acquire AT&T’s Sterling Commerce. Sterling Commerce is based in Dublin, Ohio. Sterling Commerce has about 18,000 global customers. The full press release is below:
IBM Agrees to Acquire Sterling Commerce from AT&T for $1.4 Billion
ARMONK, N.Y. and DALLAS, May 24 /PRNewswire-FirstCall/ — IBM (NYSE: IBM) and AT&T* today announced they have entered into a definitive agreement for IBM to acquire Sterling Commerce from AT&T for approximately $1.4 billion in cash. The acquisition of the Dublin, OH-based company will expand IBM’s ability to help organizations create more intelligent and dynamic business networks by simplifying and automating the way they connect and communicate with customers, partners and suppliers both on-premise or through cloud computing delivery models.
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Organizations are looking for ways to work more efficiently and profitably within their communities of business partners, customers and suppliers. IBM’s products and services complement the world-class business-to-business capabilities of Sterling Commerce and together enable the integration of key business processes through the entire cross-channel solution lifecycle — from marketing and selling to order management and fulfillment. These offerings also give clients the flexibility to manage their networks of business partners through public or private cloud computing environments.
Today, more than 18,000 global customers use Sterling Commerce offerings. The company enables more than 1 billion business interactions a year for clients in the financial services, retail, manufacturing, communications and distribution industries.
IBM sees these interactions growing dramatically due to the proliferation of electronic business transactions, from banks exchanging transaction data and manufacturers sourcing raw materials electronically, to retailers automating stock replenishment and managing orders online. Such intelligent transactions, and the software that supports them, help deliver the agility businesses need to be successful.
Sterling Commerce offerings strongly complement IBM’s middleware portfolio. By acquiring Sterling Commerce technology and its large trading partner network, IBM anticipates it will be able to deliver powerful new cross-channel solutions to its clients. In addition, Sterling Commerce technology will complement IBM’s industry-focused software offerings, enabling the addition of capabilities to IBM’s frameworks supporting the retail, manufacturing, communications, health care and banking industries.
“Businesses today are operating in a highly competitive global environment in which lines between actions taking place within and outside an organization’s four walls are blurring,” said Craig Hayman, general manager, WebSphere, IBM. “This acquisition will give IBM new tools to help clients build dynamic business networks that connect partners, suppliers and clients and deliver a consistent customer experience across channels. In addition, the fact that much of this can be done in the cloud will make it compelling to large numbers of our customers.”
According to IBM, the combined technologies and expertise of IBM and Sterling Commerce will make business and partner networks smarter and more efficient by enabling integration beyond the enterprise. The company believes that through this acquisition, clients will be able to extend the capabilities of their existing systems using, for example, IBM’s rules management, analytics and business process management software. This can enable these organizations to respond more nimbly to sudden business challenges as they happen.
“Sterling Commerce is a solid business that complements IBM’s suite of products and services. Our focus is on developing and providing a world-class portfolio of networking-based solutions and services, including network- and cloud-based data storage and managed hosting, application and computing services,” said Ray Wilkins, chief executive officer, AT&T Diversified Businesses. “And AT&T remains committed to its strategic alliance with IBM, our largest customer, to provide a unified set of telecommunications and computing services to multinational corporations across the globe.”
“The broad global reach and additional capabilities IBM offers make this acquisition great news for our customers and partners,” said Bob Irwin, chief executive officer, Sterling Commerce. “The combination of IBM’s products, services and skills with the Sterling Commerce B2B integration and cross-channel capabilities resulting from this acquisition is unparalleled.”
Consistent with its software strategy, IBM plans to continue to support Sterling Commerce clients and enhance Sterling Commerce technologies while allowing these organizations to take advantage of the broader IBM portfolio. Following the close of the acquisition, approximately 2,500 Sterling Commerce employees will be integrated into the WebSphere organization within IBM’s Software Group.
IBM and AT&T expect the transaction to close in the second half of 2010, subject to regulatory approvals and the satisfaction of other customary closing conditions. AT&T expects to record a one-time pretax gain of approximately $750 million in the quarter in which the transaction closes.
About Sterling Commerce
Sterling Commerce, an AT&T Inc. (NYSE: T) company, helps companies optimize and transform their dynamic business network to accelerate revenues and reduce costs. Sterling Commerce provides cross-channel and B2B solutions for more than 18,000 customers worldwide. More information can be found at www.sterlingcommerce.com.
AT&T Inc. (NYSE: T) is a premier communications holding company. Its subsidiaries and affiliates – AT&T operating companies – are the providers of AT&T services in the United States and around the world. With a powerful array of network resources that includes the nation’s fastest 3G network, AT&T is a leading provider of wireless, Wi-Fi, high speed Internet and voice services. A leader in mobile broadband, AT&T also offers the best wireless coverage worldwide, offering the most wireless phones that work in the most countries. It also offers advanced TV services under the AT&T U-verse(SM) and AT&T DIRECTV(SM) brands. The company’s suite of IP-based business communications services is one of the most advanced in the world. In domestic markets, AT&T Advertising Solutions and AT&T Interactive are known for their leadership in local search and advertising. In 2010, AT&T again ranked among the 50 Most Admired Companies by FORTUNE® magazine.
For more information visit: http://www.ibm.com/software/websphere/announcement050410.html
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All other company, product or service names may be trademarks or registered trademarks of others. Statements concerning IBM’s future development plans and schedules are made for planning purposes only, and are subject to change or withdrawal without notice. Reseller prices may varyThis article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry