IBM to acquire Telelogic

Move to boost IBM software capabilities across-the-board

IBM Corp. will offer about $745 million to purchase outstanding shares of Telelogic AB, a Sweden-based company that creates tools for software development. The offer is 21 Swedish Kronor per share, or about $3 in U.S. currency.

Although the companies have agreed on the acquisition, there are still several steps remaining. IBM needs acceptance from the holders of 90 percent of Telelogic's stock, and the companies still need regulatory and governmental clearances. When the deal does close, Telelogic will become part of IBM's Rational Software division.

Telelogic's products aid software developers in defining, modeling, building and testing. The company reports about 8,000 customers worldwide, primarily in aerospace, defense, telecommunications and automotives. While the company is headquartered in Malmö, Sweden, it has a U.S. headquarters in Irvine, Calif.

The company's 2006 revenue totaled about $208 million.

"Software is the lifeblood of complex systems," said Danny Sabbah, general manager of IBM Rational Software. "IBM's acquisition of Telelogic will complement our entire portfolio to help our clients drive efficient and effective software development processes that are vital to product delivery."

Anders Lidbeck, Telelogic's president and chief executive officer, said the deal will benefit Telelogic's customers as well, giving them access to a broader range of technologies and capabilities.

IBM of Armonk, N.Y., has more than 355,000 employees and had annual revenue of $91.4 billion in 2006. The company ranks No. 18 on Washington Technology's 2007 Top 100 list of the largest federal government prime contractors.

About the Author

Technology journalist Michael Hardy is a former FCW editor.

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