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IBM
completes acquisition of Rational Software
Posted: 21 February 2003
Armonk, New York — IBM today announced
the completion of its $2.1 billion acquisition of Rational Software
Corp.
Rational provides open, industry standard tools, best practices
and services for developing business applications and building software
products and systems, including embedded software for devices such
as cell phones and medical systems.
"Rational is an important element of our e-business on demand
initiative," said Steve Mills, IBM senior vice president and
group executive, IBM Software Group. "Rational’s complete,
open software development platform can improve the speed, quality
and predictability of software projects. It’s a perfect complement
to our existing four brands – WebSphere, DB2, Lotus and Tivoli."
Mike Devlin, who previously was Rational’s CEO, is the general
manager of the new division reporting to Steve Mills.
The net impact on earnings per share for the first quarter and
full-year 2003 is expected to be immaterial. Operating income from
Rational and associated benefits would be roughly offset by purchase
accounting charges.
Rational shareholders approved the acquisition on Jan. 22, 2003,
and the required worldwide government regulatory approval process
has been completed.
Rational, with customers in 89 countries and more than 3,400 employees,
estimates that more than 600,000 software developers use its software
tools. Rational will be integrated into IBM as the fifth brand of
IBM Software Group, a $13 billion business in 2002. IDC estimates
the market opportunity for application development software will
grow from $9 billion in 2002 to $15 billion in 2006.
EquiServe Trust Company will be the paying agent for the Rational
transaction.
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