IBM will acquire HashiCorp for $35 per share in cash, for a total value of approximately $6.4 billion, the companies announced last week.
Arvind Krishna, IBM chairman and chief executive officer, said the acquisition will "create a comprehensive hybrid cloud platform designed for the AI era."
The rise of cloud-native workloads and associated applications is driving a radical expansion in the number of cloud workloads enterprises are managing. In addition, generative AI deployment continues to grow alongside traditional workloads, and the increasingly heterogeneous, dynamic, and complex infrastructure creates massive challenges for technology professionals. The acquisition aims to streamline and simplify application, infrastructure and security lifecycle management, the companies said.
The acquisition will create a comprehensive end-to-end hybrid cloud platform that is designed to handle AI-driven complexity, and tucks in nicely with IBM's focus on strategic growth areas like Red Hat, watsonx, data security, IT automation, and consulting. It also accelerates HashiCorp's growth initiatives through IBM's world-class go-to-market strategy, scale, and reach, operating in more than 175 countries across the globe.
Financially, the acquisition expands the total addressable market (TAM) for combined hybrid and multi-cloud offerings, automation, and workload orchestration and the transaction is "expected to achieve substantial near-term margin expansion for the acquired business. It is anticipated that the transaction will be accretive to adjusted EBITDA within the first full year, post close, and free cash flow in year two," according to a statement from the companies.
