International Business Machines Corp. (IBM: Quote) said Monday that it has agreed to acquire Kenexa Corp. (KNXA: Quote), a provider of recruitment software, for $1.3 billion. IBM noted that the acquisition of Kenexa will complement its portfolio of social business and human resource business products.
Under the deal, Armonk, New York-based IBM will pay $46 per share in cash to acquire Kenexa. The offer price represents a 42 percent premium to Kenexa's closing stock price of $32.39 on Friday.
Kenexa's board of directors has approved the deal and recommended shareholders approve the transaction. Pending shareholder approval and satisfaction of regulatory and closing conditions, the transaction is expected to be completed during the fourth calendar quarter.
Following completion of the transaction, Wayne, Pennsylvania-based Kenexa will be wholly owned by IBM and its stock will no longer trade on the New York Stock Exchange.
Kenexa said that due to the pending deal with IBM, it is withdrawing all previously issued financial guidance for the full year ending December 31, 2012 as well as the third quarter ending September 30, 2012.
Kenexa combines cloud-based technology and consulting services that integrates both people and processes. The company has operations in 21 countries and employs about 2,800 people. It supports more than 8,900 customers across a variety of industries, including financial services, pharmaceuticals, retail and consumer.
IBM noted that the acquisition will enable it to help clients embrace social business capabilities, while gaining actionable insights from the enormous streams of information generated from social networks every day.
Alistair Rennie, general manager of social business, IBM said, "IBM is uniquely positioned to help clients generate real returns from their social business investments, while helping them gain intelligence into the data being generated in these networks to be more competitive in their markets."
IBM plans to continue to support Kenexa clients and enhance Kenexa technologies while allowing these organizations to take advantage of the broader IBM portfolio.
IBM noted that the adoption of social business technology is supporting the growth of big data and the need for analytics in the enterprise. According to the company, more than 60 percent of the Fortune 100 companies have licensed its solutions for social business.
Among IBM's rivals, Germany-based business software provider SAP AG (SAP: Quote) in December 2011 inked a deal to acquire cloud-based software solutions provider SuccessFactors Inc. for an enterprise value of about $3.4 billion.
In February, enterprise software giant Oracle Corp. (ORCL: Quote) agreed to acquire cloud-based software company Taleo Corp for about $1.9 billion, net of Taleo's cash and debt.
In Monday's regular session, IBM is trading at $197.17, down $0.60 or 0.30 percent on a volume of 449,767 shares.
KNXA is trading at $45.85, up $13.46 or 41.56 percent on a volume of 4.72 million shares.
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by RTT Staff Writer
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