RealTime IT News

Big Blue to Buy Telelogic For $745M

IBM  added more footprints to its software development roadmap in key sectors today with news it would buy Swedish software development firm Telelogic AB in an all-cash deal.

The tender offer price of 5.2 billion Swedish Kroner works out to 21 Swedish Kroner per share, or about U.S.$745 million. The purchase, once it closes, will add a line of software development expertise to IBM's Rational division.

Telelogic is considered a leading provider of software development tools and systems and counts more than 8,000 customers worldwide. The company's main customers are in the aerospace and defense, telecommunications and automotive industries.

The companies said Telelogic products help organizations define, model, build, test, deliver and govern the development of software used in complex systems, such as aircraft radar or a car's anti-lock braking system.

Look for Telelogic's employees and assets to join IBM's growing line of software development tools in order to help customers speed up their development of complex systems.

News of the deal will give attendees at IBM's software development conference in Florida this week something more to digest. One of the goals of the conference is to lay out for customers its latest roadmap for its Rational development platform. Those development methodologies include service-oriented architecture .

IBM said the addition of Telelogic would help, for example, a consumer electronics company design the software in an intelligent home network that controls the entertainment devices, security systems, appliances and lighting.

The acquisition follows IBM's purchase last week of Waltham, Mass.-based Watchfire, which makes AppScan a security vulnerability testing suite that lets users identify potential security risks in applications.

The product is designed to help fend off such attacks at the application layer, such as SQL injections. Just like Telelogic, IBM also plans to integrate the Watchfire assets into its Rational software line of software development tools.

In addition to its headquarters in Malmö, Sweden, Telelogic's U.S. headquarters are in Irvine, Calif. Revenues for 2006 were about $208 million, the companies said.

Danny Sabbah, general manager of IBM Rational Software, said the acquisition of Telelogic would complement the division's entire portfolio.

"From today's next generation entertainment devices to tomorrow's space-information systems, software is the lifeblood of complex systems."