IBM Acquires Telelogic For Its Rational Software Unit

IBM announced Monday that it has offered $745 million to acquire Telelogic and that it plans to integrate the software development firm into IBM's Rational Software unit.

As a developer of complex software products, Sweden-based Telelogic will complement IBM's ability to assist customers to develop high-quality complex systems that range from next-generation entertainment devices to future space information systems, IBM said.

"IBM's acquisition of Telelogic will complement our entire portfolio to help our clients drive efficient and effective software development processes that are vital to product delivery," said Dr. Danny Sabbah, general manager of the Rational Software unit, in a statement. Telelogic will report to Sabbah.

Telelogic's U.S. headquarters is in Irvine, Calif., but the firm conducts business in 40 different countries, primarily in aero/defense, automotive, financial services, telecommunications, governmental, and software/electronics. Telelogic counts more than one-third of the 500 largest worldwide companies as customers.

"This acquisition will provide our clients with enhanced capabilities to develop and deploy complex systems on a global basis," said Anders Lidbeck, Telelogic's president and CEO, in a statement. "IBM and Telelogic clients will be able to leverage a broader set of capabilities without the need to replace existing systems."

The acquisition is the latest in IBM's long march to add to its strength as a computer services provider. Rational Software itself was acquired in 2003, and scores of software providers have been added since then to IBM's portfolio.

IBM offered 21 Swedish Kronor a share for Telelogic, which adds up to a 5.2 billion Swedish Kronor ($745 million) total offer. Telelogic reported $208 million in revenue in 2006, IBM and Telelogic said, noting that $89 million in license revenue alone was recorded.