IBM to pay $1.3B for security provider

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IBM announced today that it has entered into a definitive agreement to purchase Internet Security Systems (ISS), a publicly traded Internet security provider based in Atlanta.

The all-cash transaction is worth about $1.3 billion, or $28 per share, and is subject to ISS shareholder and regulatory approvals and other closing conditions, according to an IBM statement. The company expects the transaction to close by the end of 2006.

ISS, which has 11,000 customers, has sold security solutions to companies and governments to help them ward off Internet threats on networks, desktop PCs and servers. ISS software and services monitor and manage network vulnerabilities and respond to potential threats.

IBM called the acquisition “an important addition to its security and privacy services business.” It is the latest step in its strategy to use information technology “services, software and consulting expertise to automate labor-based processes into standardized, software-based services that help clients optimize and transform their businesses,” the company said.

IBM said it will continue to make available ISS’ X-Force security intelligence service, which protects networks with detailed analyses of global online vulnerabilities and threat conditions. The ISS network of security operations centers, with sites in Tokyo; Brussels, Belgium; Brisbane, Australia; Detroit; and Atlanta, will join IBM’s global security centers.

Following completion of the acquisition, IBM said it 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 security and security information management.
  • Market and sell ISS’ Managed Security Services and its portfolio of protection products through its and ISS’ worldwide sales channels and business partners.
  • Expand the scope and capabilities of IBM’s business and IT asset management consulting practices and deliver services for ISS-based solutions through IBM Global Services.
“ISS is a strategic and valuable addition to IBM’s portfolio of technology and services,” said Val Rahmani, IBM’s general manager of infrastructure management services, in a statement. “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.”

About the Author

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

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