IBM set for acquisition spree in India

New Delhi: After spending close to $5 billion for 13 acquisitions in 2006, world's largest computer services provider IBM plans to keep up its pace of acquisitions in 2007 and has earmarked Indian IT space as a key target region.

IBM is believed to acquire mostly small-to-mid sized software firms in India, although it is not averse to acquiring large companies at the right price.

While the company is tight-lipped about its potential targets, merchant banking sources close to the development said that the company could strike deals close to a billion dollars in the next few months in the software space.

The company's acquisitions in 2006 were in the software space, an area where IBM is bullish about growth prospects in future as well.

However, IBM's targets are unlikely to include listed firms as the company considers them as overvalued following the sharp rally in IT stocks over the recent past.

The New York Stock Exchange listed company said, in a communique to its shareholders through a regulatory filing last week, that it plans to continue the accelerated pace of acquisitions in 2007.

The company has invested nearly $16 billion in over 60 acquisitions in the past five years, making it the most acquisitive company in the technology space.

IBM's acquisition strategy would be broadly based on getting a jump-start into emerging market opportunities and to add important and missing technology or expertise areas to its portfolio, in addition to expanding market share and reach of products to customers.

"In today's rapidly changing marketplace, one must look at all sources of innovation to sustain one's value proposition to the customer. As a consequence, IBM has become more and more acquisitive," PTI quoted the company's Chief Financial Officer Mark Loughridge as saying.

According to IBM sources its early performance results on 2006 acquisitions are very strong.

In 2006, the company's acquisitions included FileNet ($1.6 billion), Internet Security Systems ($1.4 billion), Micromuse ($0.9 billion) and MRO Software ($0.7 billion).