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IBM to Acquire HashiCorp in a $6.4 Billion All-Cash Deal

  • April 25, 2024

IBM HCP Merger

International Business Machines (IBM) will acquire California-based cloud software provider HashiCorp Inc (HCP) in a deal valued at $6.4 billion, the company announced on April 24, to expand its cloud-based products and be a part of the AI boom.

IBM will pay $35 per share to HashiCorp, representing a premium of 11.43% based on the stock’s last close. HashiCorp’s shares had surged after reports of the deal talks on April 23. The merger arbitrage spread on the deal is 6.71% implying some concerns that regulators might attempt to block the deal.

The California-based company provides cloud solutions to its customers where they can establish and manage their infrastructure.

IBM announced its intent to acquire the cloud software provider with its quarterly results where it reported first-quarter revenues below market estimates. It reported total revenues of $14.46 billion compared to market estimates of $14.54 billion, with its consulting segment sales flat in the quarter.

IBM, the Big Blue of the U.S. technology landscape, has been transforming itself into a company focused on the hybrid cloud and artificial intelligence businesses. Last year, IBM acquired the technology spend-management platform Apptio from Vista Equity Partners for $4.6 billion.

The company expects to fund the deal with the available cash in hand and the deal is expected to close by the end of 2024.

For more in-depth information and metrics related to this merger, kindly refer to the following link:
Deal Metrics for the acquisition of HashiCorp by IBM

Editor’s Note: Baranjot Kaur contributed to this article.

Disclaimer: Please conduct thorough due diligence before buying or selling any securities mentioned in this article. We do not guarantee the completeness or accuracy of the content or data provided in this article.