IBM Acquires Analytics Software Maker SPSS for $1.2 Billion in Cash

IBM has announced that it will acquire Chicago-based SPSS, a software company specializing in predictive analytics solutions. The deal is a cash-only transaction putting the per-share price of SPSS stock at $50, 42 percent over the closing trading price of $35.09 last night, which sets a $1.2-billion valuation for the company. The price has jumped to over $49 per share when the market opened. SPSS is a publicly traded company and the deal has yet to be approved by shareholders and get the approval of regulatory bodies.

"With this acquisition, we are extending our capabilities around a new level of analytics that not only provides clients with greater insight – but true foresight," Ambuj Goyal, general manager, Information Management at IBM, said. "Predictive analytics can help clients move beyond the 'sense and respond' mode, which can leave blind spots for strategic information in today's fast paced environment – to 'predict and act' for improved business outcomes."

The deal is expected to solidify IBM's position in the analytics market, where it already has a comprehensive portfolio of products and services under the Information on Demand (IOD) software umbrella, including the newly announced Business Analytics and Optimization Consulting organization. SPSS will become part of the Information Management division in the Software Group business unit under the leadership of Ambuj Goyal.

Predictive analytics software is used by companies to anticipate future behavior of consumers based on the data and trends currently available. If accurate, the data can prove very valuable for companies, aiding them in decisions and new business ventures. IBM already had a presence in the market with its IOD set of services, but the company plans to sell SPSS products along with its own. IBM estimates the market for predictive analytics software will grow to $25 billion worldwide this year, a four-percent rise over 2008.