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March 31, 2016
martinwolf Transaction Analysis
IBM Acquires Bluewolf
 
Financial Information*
  • Transaction Size                             $200 million
  • EV/Revenue                                    2.0x
Transaction Facts
  • IBM (NYSE:IBM) today announced the acquisition of global consulting agency Bluewolf. Bluewolf will join IBM's Interactive Experience unit, part of the company's Global Business Services consulting division.
  • A Salesforce Global Strategic Partner, Bluewolf has been named a worldwide leader in the Salesforce implementation system by IDC and provides high-value digital services for companies in the BFSI, Healthcare and Life Sciences, Higher Education and other fields.
  • The transaction is the latest in a series of high profile acquisitions made by IBM so far this year, including February's $3.6 billion purchase of Truven Health Analytics and its purchase of Optevia earlier this month.
Another Big Bet as IBM Buys Progress on Transformation
  • Looking Forward, but Not Far Enough: With this acquisition, IBM is moving to catch up with an industry of competitors unburdened by Big Blue's 100-year legacy. It's IBM's latest instance of skating to where the puck is, rather than where it's going.
  • A Deliberate Approach: For IBM, cloud services are experiencing high growth but offer lower margins than its traditional offerings. While the company has devoted significant resources to the cloud, it has sought to preserve revenue and profitability from its legacy software agreements - and as a result, its cloud transition has not achieved its maximum potential pace.
  • Culture Differences Threaten Integration: With every acquisition, particularly large ones such as this, the process following the signed agreement is every bit as critical as the negotiations leading up to it. While IBM has been moving into current trending areas like cloud and analytics, it remains at its core a large, integrated conglomerate - the opposite of the more millennial-driven Bluewolf.
  • New Acquisition, New Opportunities: This is a services-driven expansion - Bluewolf does not itself have significant recurring revenue or IP of its own. What it does offer to IBM is its client base and a host of new offerings to enhance IBM's existing services portfolio.
For more information about this transaction,  click here to read the press release.

*While financial information for this transaction was not disclosed, numerous media sources estimated the total transaction size to be approximately $200 million. Additional media sources estimate Bluewolf revenue at approximately $100 million.

martinwolf was not the advisor in this transaction.

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About martinwolf    


With offices in the San Francisco Bay Area, martinwolf is a leading M&A Advisory focused on middle market companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed more than 140 transactions in nineteen countries and sold seven divisions of Fortune 500 companies. 

 

The firm is also a presenting sponsor of the Global IT M&A Forum.   

 

martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.  

 

To learn more about martinwolf, contact Matthew Putzulu at mputzulu@martinwolf.com.

 

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