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IBM to Buy Internet Security for USD 1.3 bln

IBM has agreed to buy Internet Security Systems (ISS) Inc. for about USD 1.3 billion, or USD 28 per share in an all-cash transaction to expand its product line in the rapidly growing business of Internet security.

ISS software, appliances and services monitor and manage network vulnerabilities and exploits and rapidly respond in advance of potential threats. This acquisition advances IBM's strategy to utilize IT services, software and consulting expertise to automate labor-based processes into standardized, software-based services.

"ISS is a strategic and valuable addition to IBM's portfolio of technology and services. This acquisition will help IBM to provide companies with access to trained experts and leading-edge processes and technology to evaluate and protect against threats and enforce security policies." said Val Rahmani, General Manager, Infrastructure Management Services, IBM Global Services.

IBM will utilize ISS' X-Force security intelligence service, which proactively protects networks with detailed analyses of global online vulnerabilities and threat conditions. The ISS global network of security operations centers (SOCs), which include sites in Tokyo, Brussels, Brisbane, Detroit and Atlanta, will also be added to IBM's existing global network of SOCs. IBM security consultants and global sales force will also offer ISS' line of security appliances and software, and fully enable it for IBM and third party products, services and solutions.

Following completion of the acquisition, IBM intends to:

Establish ISS' operations as a business unit within IBM's Infrastructure Management Services unit, part of IBM Global Technology Services
Integrate ISS' software technology with Tivoli's IT service management portfolio, which includes software for Identity Management, Access Management, Service Oriented Architecture (SOA) security and Security Information Management
Market and sell ISS' Managed Security Services and portfolio of Network, Application, Server and Endpoint Protection products through IBM's and ISS' worldwide sales channels and Business Partners

The transaction is expected to close in the fourth quarter of 2006.

The deal marks the fourth software-related deal announced by IBM this month. Their combined value tops the USD 2 billion that IBM spent on acquisitions for all of last year.

Earlier this month, IBM said it would buy FileNet Corp. for USD 1.6 billion, its biggest purchase in three years; MRO Software Inc. for USD 740 million and privately held Webify Solutions for an undisclosed sum.


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