NEW YORK - Kyndryl (NYSE: KD), the world's largest IT infrastructure services provider, has acquired Skytap, a specialized workload services provider, to enhance its hybrid cloud offerings. This move is part of Kyndryl's strategy to invest in areas critical to customer growth and transformation, as announced by the company today.
Skytap's technology, known for facilitating the transition of complex workloads into hyperscaler environments, will be integrated with Kyndryl's existing services. The goal is to help customers adopt advanced analytics, artificial intelligence, and DevSecOps more efficiently by leveraging cloud native services. Skytap's expertise in running mission-critical systems in the public cloud with minimal changes is expected to complement Kyndryl's portfolio.
In addition to this acquisition, Kyndryl disclosed its decision to sell its Securities Industry Services (SIS) business in Canada to Broadridge Financial Solutions (NYSE:BR), Inc. The divestiture aligns with Kyndryl's focus on its core growth areas, and the company plans to continue providing managed services related to SIS post-sale.
The financial impact of both the Skytap acquisition and the SIS divestiture on Kyndryl's revenue is minimal, with combined revenues from both entities accounting for less than 1% of Kyndryl's annual revenue. The company anticipates a gain from the SIS transaction, which will be excluded from its adjusted results. Kyndryl has stated that these transactions will not affect its fiscal year 2025 outlook, initially provided on May 7, 2024. Proceeds from these transactions are intended for general corporate purposes.
The completion of the SIS sale is subject to customary closing conditions, including regulatory approvals. Specific terms of both transactions have not been disclosed.
Based on a press release statement, this article reports on Kyndryl's strategic actions to optimize its portfolio by acquiring Skytap and divesting its SIS business, reflecting the company's commitment to enhancing its hybrid cloud capabilities and focusing on its core growth areas.
InvestingPro Insights
As Kyndryl (NYSE: KD) solidifies its market position through the acquisition of Skytap and the divestiture of its SIS business in Canada, investors are monitoring the company's financial health and stock performance. Kyndryl's market capitalization stands at $6.27 billion, indicative of its substantial presence in the IT Services industry, a factor that aligns with its strategic decisions.
Despite a challenging environment, Kyndryl's stock has experienced a significant return over the last week, with a 30.54% price total return. This momentum extends over the last month and three months, with returns of 33.28% and 32.38%, respectively. Such performance highlights investor confidence in the company's direction, which could be bolstered by the recent strategic moves.
An InvestingPro Tip suggests that Kyndryl is a prominent player in the IT Services industry, a status that could be further enhanced by integrating Skytap's capabilities into its service offerings. Additionally, analysts predict the company will be profitable this year, a positive sign for potential investors considering Kyndryl's growth trajectory.
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