IBM to buy two software AG data platforms for $2.3 bn to strengthen AI

By Olivia Solon and Agatha Cantrill

International Business Machines Corp. has agreed to buy data-integration platforms StreamSets and WebMethods from Software AG for €2.13 billion ($2.3 billion) in cash in an effort to strengthen its AI and cloud capabilities.

The deal is expected to complete in the second quarter of 2024, subject to regulatory approvals, Armonk, New York-based IBM said in a statement on Monday.

The investment comes as demand increases for cloud services tailored to AI applications, IBM said. StreamSets allows companies to ingest vast amounts of data for training AI systems, while WebMethods helps companies better manage application planning interfaces — software gateways that allow different systems to interact with each other.

German software company Software AG is majority owned by private equity firm Silver Lake Management, which made an offer on Monday to delist the business at €32 per share after months of increasing its holding. Shareholders have four weeks to tender their shares. 

Silver Lake won a takeover battle over Software AG with Bain Capital earlier this year, even though the Boston-based buyout firm offered a higher price. Software AG’s management reviewed Bain’s bid and declined to conduct due diligence, drawing criticism from minority shareholders. 

Software AG Chief Executive Officer Sanjay Brahmawar said at the time that Silver Lake was “aligned” with the company’s strategic direction.

Software AG specializes in tools that help businesses connect different pieces of enterprise software. Clients include Shell, BT, LG, Hyundai and GSK, according to its website.