IBM has announced an agreement to buy data storage firm Netezza for $1.7 billion.
The all cash deal will see IBM pay $27 per share of Netezza, a 10 percent increase on its previous closing price of $24.60 per share.
The move comes only days after IBM’s CEO, Samuel J. Palmisano, slammed HP for paying $2.4 billion for storage company 3PAR, three times the company’s value. While it could be said that IBM is following suit by buying a storage company for a similar amount, IBM is only paying a 10 percent premium, compared to HP’s 300 percent premium for 3PAR.
The Netezza acquisition has raised some questions about other big storage companies, such as Teradata, which Larry Dignan at ZDNet believes may be bought out by HP. That is, of course, providing it can afford it after the 3PAR deal. Oracle may also be another candidate. There is even the possibility of a bidding war over Netezza, but given previous statements Palmisano is unlikely to play that game for long.
IBM was already one of Netezza’s partners for several years, along with other big names like Microsoft, EMC, Cognos, and SAS. Netezza also has Neiman Marcus, Time Warner, and Virgin Media as customers, all of whom will be added to IBM’s customer base should the transaction be approved.
Netezza, which is based in Marlborough, Massachusetts, was established in 2000 and currently operates in 12 countries with a workforce of just under 500. It makes products focusing on data storage, business analytics, and data compliance, while operating within a number of sectors, including digital media, government, energy, financial, telecommunications, health, and retail.
The acquisition will be subject to standard approval and regulatory processes.