ARMONK, N.Y. - IBM (NYSE:IBM) has announced plans to acquire Accelalpha, a prominent Oracle (NYSE:ORCL) Cloud Applications service provider, to bolster its Oracle consulting capabilities, particularly in supply chain, logistics, finance, enterprise performance management (EPM), and customer transformation. This move is expected to enhance IBM's ability to assist clients in adopting Oracle Cloud Applications and modernizing their core business operations.
Accelalpha, headquartered in Bellevue, Washington, is known for its Oracle Cloud Applications consulting services, which span advisory, implementation, and managed services. The company's team, with a presence across North America, Europe, Asia, the Middle East, and South America, specializes in sectors including distribution, industrial, and financial services.
The integration of Accelalpha into IBM Consulting will bring a significant global team of skilled consultants to support client transformations with Oracle Cloud Applications. Kelly Chambliss, Senior Vice President of IBM Consulting in the Americas, emphasized the strategic importance of Oracle in running essential enterprise workflows and how the acquisition will position IBM to better deploy and manage Oracle solutions for competitive advantage.
Accelalpha's expertise covers a range of Oracle Cloud Applications, such as Oracle Supply Chain Management (SCM) and Logistics, Oracle Cloud Enterprise Resource Planning (ERP), Oracle Cloud EPM, Oracle Cloud Customer Transformation (CX), and Oracle Configure, Price, Quote (CPQ). The company has been recognized for its pioneering work in Oracle Cloud, including being the first Oracle partner to implement Oracle Fusion Financials.
Nat Ganesh, CEO of Accelalpha, expressed enthusiasm for joining forces with IBM, highlighting the potential for accelerated value creation for clients through the combination of Accelalpha's Oracle Cloud solutions expertise and IBM's strengths in generative AI and hybrid cloud technology.
The acquisition is anticipated to close in the fourth quarter of 2024, pending customary closing conditions and regulatory approvals. Financial terms of the deal have not been disclosed.
IBM's partnership with Oracle has spanned nearly 40 years, and IBM was named a Leader in the 2023 IDC MarketScape for Oracle Implementation Services Ecosystem Worldwide. With this acquisition, IBM aims to further solidify its position as a leader in global hybrid cloud and AI consulting services.
This article is based on a press release statement.
In other recent news, IBM has been the focus of several significant developments. Goldman Sachs (NYSE:GS) has maintained its Conviction Buy rating on IBM, setting a price target of $220.00, based on the company's solid demand in infrastructure software and potential gains from mergers and acquisitions. IBM's management is optimistic about long-term revenue growth, expecting mid-to-high single-digit increases.
IBM's recent unveiling of the IBM Telum II Processor and IBM Spyre Accelerator at the Hot Chips 2024 conference marked a significant stride in its AI capabilities. These technologies are expected to enhance the capacity of IBM Z mainframe systems for enterprise-scale AI and are planned to be available to clients in 2025.
In financial developments, IBM announced a regular quarterly cash dividend of $1.67 per common share, demonstrating its financial stability and commitment to shareholder returns. The proposed merger between IBM and cloud software vendor Hashicorp is currently undergoing a preliminary review by the UK's Competition and Markets Authority, assessing the potential impact on competition within the UK market.
In terms of workforce, IBM, like many companies across various sectors, is experiencing layoffs but is also focusing on hiring for AI-centered roles. BMO Capital Markets and Stifel have both raised their price targets for IBM shares following the company's recent financial performance and uplifted margin and free cash flow forecast for 2024. These are the recent developments in the company.
InvestingPro Insights
As IBM (NYSE:IBM) positions itself to enhance its consulting capabilities with the acquisition of Accelalpha, a closer look at the company's financial metrics and market performance provides additional context for investors. IBM's commitment to shareholder returns is evident, with the company having raised its dividend for 28 consecutive years, a testament to its financial resilience and dedication to long-term value creation. Furthermore, IBM's status as a prominent player in the IT Services industry is supported by its consistent dividend payments over 54 years, showcasing its ability to navigate the evolving technological landscape.
InvestingPro data highlights IBM's robust market capitalization of $187.25 billion, reflecting its significant presence in the market. The company's P/E ratio stands at 22.07, with a slight adjustment to 21.71 over the last twelve months as of Q2 2024, indicating investor confidence in its earnings potential. Additionally, IBM has demonstrated a solid revenue growth of 3.04% over the same period, with gross profit margins maintaining a strong position at 56.09%, signaling efficient operations and profitability.
Investors tracking IBM's stock performance will note that it is trading near its 52-week high, with a price percentage of 98.82% of that high. This, combined with a strong return over the last three months of 19.11%, suggests a bullish sentiment in the market. For those seeking more in-depth analysis, InvestingPro offers additional InvestingPro Tips, with a total of 9 tips available for IBM at https://www.investing.com/pro/IBM, providing valuable insights into the company's financial health and market positioning.
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