IBM to acquire business software maker
Published: 30 Oct 2001 16:52 GMT
IBM said Tuesday it will snap up CrossWorlds Software for $129m in cash, in a move to strengthen its infrastructure software business.
The move builds on IBM's long relationship with CrossWorlds, a company whose software automates tasks such as customer-relationship management and supply chains. IBM has been integrating CrossWorlds' software with its WebSphere middleware, or e-business infrastructure product, for four years.
CrossWorlds is known for former chief executive Katrina Garnett's appearances in some racy advertisements at the height of the dot-com bubble. Garnett, who stepped down in October of 1999, appeared in print ads, which featured her wearing a low-cut black evening dress, and downplayed the company's name with small print.
CrossWorlds will report its third-quarter results after Tuesday's closing bell. First Call is expecting the company to lose 4 cents a share.
Since then, the company has struggled to keep up with larger competitors, such as Oracle, that have made forays into the infrastructure software field. The company has also suffered in the wake of the 11 September attacks, though analysts say Crossworlds is likely to meet September-quarter estimates.
"The company will likely make the September quarter," said Dain Rauscher Wessels analyst Sarah Mattson, who lowered her estimates for the company in a September research note. IBM has said that infrastructure software is a priority. Its WebSphere business has already seen strong growth, with revenue up 75 percent over last year's in the third quarter of 2001. The company's integration software, MQSeries, grew 129 percent over the same time period.
The acquisition is expected to close in the first quarter of 2002 and is still subject to CrossWorlds shareholder and regulatory approval.
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