IBM to Buy Cognos Software Maker for $4.9B

IBM Corp. said Monday it would buy Canadian business-software maker Cognos Inc. for $4.9 billion as part of its information-on-demand strategy.

The $58-a-share, all-cash deal — 9.5 percent more than Cognos’s closing price Friday — will enable new business insights to be delivered to a broader set of people across an organization, beyond the traditional users of business intelligence, the companies said in a statement.

Business intelligence refers to technologies, applications and practices to improve business decision making through fact-based support systems.

Cognos President and Chief Executive Officer Rob Ashe said the deal provided Cognos, which has about 4,000 employees and more than 25,000 customers, with the ability to expand our vision as the leading (business-intelligence) and performance management provider.

IBM said it chose Ottawa’s Cognos, the 23rd IBM acquisition in support of its information-on-demand strategy, because of its industry-leading technology that is based on open standards, IBM Software Group Senior Vice President Steve Mills said.

IBM intends to integrate Cognos into its Information Management Software division and appoint Ashe to lead the group, IBM said.

The acquisition will contribute to earnings-per-share growth through 2010, IBM said

Software is IBM’s smallest business by sales but its biggest profit-growth driver.