IBM to acquire DemandTec

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IBM has agreed to acquire software company DemandTec for approximately $440 million in cash, the company said Dec. 8. The acquisition, which is expected to close in the first quarter of 2012, is designed to add cloud computing analytics technology to IBM's digital commerce toolset.

IBM plans to fold DemandTec into its Enterprise Marketing Management Group, and sell DemandTec's technology as part of the IBM Smarter Commerce platform, IBM said in a statement. IBM built up this platform through acquisition over the past two years. Last year, IBM acquired web analytics firm Coremetrics and cross-channel management provider Unica.

“The goal is to expand the portfolio of solutions that we offer,” said Jay Henderson, global strategy program director at IBM Enterprise Marketing Management Group. “DemandTec was acquired to help with pricing and promotion optimization.”

This is the seventh acquisition for IBM as a whole and the fourth in the Smarter Commerce category this year. The company has said that it will spend $20 billion by 2015 acquiring technology companies.

DemandTec's technology examines different consumer buying scenarios — both online and offline — to identify potential opportunities for retailers. It then analyzes the data to suggest variables such as pricing, promotions and merchandising.

Logistically speaking, Henderson said that there are no plans to move offices yet. Headquartered in San Mateo, Calif., DemandTec employs 350 employees across its offices, which also include locations in Minneapolis, London, Paris and Bangalore.

IBM, which has offices all over the world, gained a San Mateo office in the Coremetrics acquisition last year.

When asked if there would be layoffs or new hires, Henderson said, “We have not officially decided. But the acquisition is all about growing DemandTec business.”

Henderson said that IBM is excited to tap into DemandTec's client base, which includes 450 customers in the retail and consumer products verticals.

“We are excited that core strengths of the DemandTec base are with retail and consumer goods, because this is well aligned with our portfolio,” he said. “We are also excited to show IBM customers the DemandTec tools, because it is a very complimentary technology for our customers.”

The acquisition is subject to DemandTec shareholder approval, as well as regulatory clearances.


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