Big Blue’s recent shopping spree

Contact: Brenon Daly

After a slow start to the year, IBM has dramatically picked up the pace – and the spending – in its M&A program. Big Blue only announced its first deal of 2011 in late March, and then was out of the market for nearly a half-year. But in the past two months alone, it has announced four deals. And each of the purchases, according to our estimates, was valued in the hundreds of millions of dollars.

Since late August, IBM has acquired analytics and visualization software vendor i2 Group, an analytics firm focused on financial services called Algorithmics, security management specialist Q1 Labs, and – just last week – HPC pioneer Platform Computing. Although IBM only released the value of one of those transactions, we estimate the collective tab on the two-month shopping spree is in the neighborhood of $1.5bn.

The purchases come as IBM shares have been trading around their highest-ever levels. So far this year, Big Blue stock has tacked on some 27%, while the Nasdaq Index has basically flat-lined. IBM will give its latest check-up to Wall Street after the closing bell today, with investors looking for third-quarter earnings of about $3.22 per share on sales of some $26.3bn. Ahead of the release, the stock was trading in-line with the broad market.