Computing giant IBM (IBM) said it has completed its $6.4 billion acquisition of HashiCorp (HCP), whose products it hopes will boost its hybrid cloud and generative AI credentials.
IBM completed the transaction after the UK’s competition regulator on Tuesday said it will not refer the deal to a detailed phase 2 investigation. IBM, which first said it was looking at buying HashiCorp ten months ago, said the U.S. Federal Trade Commission gave the deal the thumbs up just prior to the U.K.’s Competition and Markets Authority (CMA) decision.
“Big Blue” as IBM is known, has been on the up, with shares rallying to a record high and the market cap topping $240 billion this year as it drives its AI business through a series of acquisitions. Earlier this week IBM said it was buying AI and data solution provider DataStax. IBM also announced an expanded partnership with Qualcomm (QCOM) this week as well as a tie-up with Juniper Networks (JNPR) today. IBM’s dealmaking machine has been on top speed with its $34 billion Red Hat purchase in 2019 and the $4.6 billion deal for Apptio in 2023.
Big Blue Sees Bright Future
“Organizations globally are looking to deploy modern, hybrid cloud-ready apps, which require automated cloud infrastructure at significant scale,” said Rob Thomas, Senior Vice President, IBM Software and Chief Commercial Officer. “With this acquisition, IBM is committed to continuing to invest in and grow the HashiCorp capabilities, and together, with HashiCorp’s leading technology and extensive developer community, IBM’s global reach and R&D resources, our aim is to infuse HashiCorp technology in every data center.”
IBM hopes the deal will enable it to provide the infrastructure automation to serve the creation of 1 billion new cloud-native applications by 2028.
Hashicorp’s Terraform, which helps companies configure the various hardware, software, and network components required to run applications and services, is seen as a good fit for IBM’s cloud-based strategy.
Its Terraform and Vault offerings, along with the broader HashiCorp product portfolio, are available now from IBM’s automation software portfolio, the tech giant said in a release.
IBM also said that HashiCorp Vault combined with Red Hat OpenShift to provide improved security capabilities across hybrid cloud environments.
Is IBM a Good Stock to Buy Now?
Overall, on Wall Street IBM has a Moderate Buy consensus based on seven Buys, six Holds and one Sell rating. The average IBM price target of $260.00 implies over 2% upside to current levels.
