IBM CEO Sam Palmisano said in a meeting with investors earlier this month that his company plans to spend $20 billion on acquisitions over the next five years. IBM announced Monday its first billion-dollar deal of 2010, acquiring Sterling Commerce from AT&T for $1.4 billion in cash.
If IBM makes good on its plans to spend $20 million on takeovers between 2010 and 2015, it will represent a more accelerated acquisition pace than IBM has maintained since Palmisano took the CEO position in March 2002.
IBM has spent roughly $14 billion to acquire 70 companies since 2002, according to a presentation by Mark Loughridge, IBM’s senior vice president and CFO. Nearly half of those deals were inked in the last three years. From 2007 to 2009, IBM acquired 33 companies for $9 billion, with investments concentrated in business analytics.
The Sterling deal ranks among IBM’s largest in recent years. IBM spent $1.2 billion to acquire analytics player SPSS last year, and in 2007 it offered $5 billion to acquire Cognos.
IBM is paying $1.4 billion in cash to acquire Sterling Commerce, an AT&T company that makes business-to-business e-commerce software designed to help companies connect with the systems of their customers, partners and suppliers. It also operates a hosted trading partner network for connecting business partners.