IBM to acquire HashiCorp in $6.4 billion deal; how it bolsters cloud offerings
Upstox
2 min read • Updated: April 25, 2024, 3:56 PM
Summary
IBM said that HashiCorp will help with the company's "deep focus and investment in hybrid cloud and AI". The New York-based company said the acquisition will "enhance" its ability to address the total cloud opportunity, which has a total addressable market of $1.1 trillion.
Tech giant IBM will acquire software company HashiCorp in a $6.4 billion deal to create a comprehensive end-to-end hybrid cloud platform, the company said on Wednesday.
Under the definitive agreement, IBM will acquire HashiCorp for $35 per equity share, which is a 42.6% premium to the closing price on Monday.
In a statement, IBM said that HashiCorp will help with the company's "deep focus and investment in hybrid cloud and AI". The New York-based company said the acquisition will "enhance" its ability to address the total cloud opportunity, which has a total addressable market of $1.1 trillion.
"HashiCorp has a proven track record of enabling clients to manage the complexity of today's infrastructure and application sprawl. Combining IBM's portfolio and expertise with HashiCorp's capabilities and talent will create a comprehensive hybrid cloud platform designed for the AI era," said Arvind Krishna, IBM chairman and chief executive officer.
Armon Dadgar, HashiCorp co-founder and chief technology officer, said, "IBM's leadership in hybrid cloud, along with its rich history of innovation, make it the ideal home for HashiCorp as we enter the next phase of our growth journey".
How can IBM benefit from HashiCorp?
HashiCorp, the infrastructure cloud company, has over 4,400 clients, including major firms like Bloomberg, Deutsche Bank, Comcast, GitHub, JP Morgan Chase, Vodafone and Starbucks. The company's products are used by 85% of the Fortune 500. HashiCorp offers various community products across security and infrastructure that have been downloaded more than 500 million times. These products include:
- Terraform- Infrastructure-as-code software tool
- Vault- Identity-based secrets and encryption management system
- Boundary- An identity-aware proxy
- Consul- Service networking solution
- Nomad- Flexible scheduler and workload orchestrator
- Packer- Multi-cloud artefact registry
- Waypoint- Internal developer platform made easy
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IBM said combining the two companies' "portfolios and talent will deliver clients extensive application, infrastructure and security lifecycle management capabilities. The transaction will accelerate IBM's growth profile over time driven by go-to-market and product synergies."
The acquisition is expected to be completed by the end of 2024.