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.”