IBM Acquires Apptio for $4.6 Billion to Fuel Growth

International Business Machine (IBM:US) announced today that it has agreed to acquire Apptio, a software company working in the space of financial and operational IT management and optimization, for $4.6 billion. IBM will use its cash reserves to acquire Apptio with the deal expected to be closed in the second part of 2023.

IBM acquired Apptio from private equity firm Vista Equity Partners, which acquired the software startup back in 2019 for about $2 billion. IBM hopes that this acquisition will help it further advance its IT automation capabilities.

The tech legacy giant has placed an increased level of focus on hybrid cloud, blockchain, artificial intelligence (AI), and machine learning (ML) in recent years. Considering a couple of years back in time, the company has been struggling to reaccelerate its growth, which ultimately resulted in a subdue stock performance.

"Apptio's offerings combined with IBM's IT automation software and watsonx AI platform, gives clients the most comprehensive approach to optimize and manage all of their technology investments,” said Arvind Krishna, CEO and chairman, IBM.

This is the first major acquisition for IBM after spending nearly $34 billion to acquire RedHat back in 2019. In the meantime, the IT company divested Kyndryl (KD:US) and is reportedly mulling whether to sell its weather business. 

Last week, Congressman Michael McCaul disclosed he sold IBM shares in two transactions dated May 12, when the stock closed at $122.84. These two transactions were worth $100,000 - $250,000 and $15,000 -$50,000 each. The sale comes after Mr. McCaul was buying IBM shares back in March at levels similar to those seen today.

Elsewhere, Representatives Ro Khanna and Lloyd Doggett were also trading the stock in recent months.