IBM To Acquire Marketing Application Developer Unica For $480 Million

IBM is offering $21 per share to acquire the publicly held Unica and it expects to close the deal sometime in the fourth quarter of 2010, subject to Unica shareholder approval and other regulatory clearances.

"Customers are looking to build customer loyalty,” said Craig Hayman, general manager of IBM industry solutions, in a conference call. The addition of Unica’s software to IBM’s product portfolio will help IBM clients “analyze and predict their customers’ preferences and better target their marketing campaigns.”

Unica, based in Waltham, Mass., is the latest in a string of IBM acquisitions of companies that develop software for marketing, demand generation, sales, order processing and fulfillment. Last week IBM closed its acquisition of Coremetrics and its Web analytics software for an undisclosed price, and the company is working to wrap up its $1.4 billion acquisition of Sterling Commerce, a supplier of supply chain and business-to-business collaboration applications.

All of those technologies, including Unica’s software, will be integrated with IBM’s WebSphere Commerce software targeting the enterprise market-management software segment, which IBM said represents a $2.5 billion opportunity with double-digit annual growth.

“No one today has pulled together this end-to-end story,” Hayman said of the combined capabilities of the acquisitions and WebSphere Commerce.

In May IBM CEO Sam Palmisano said the company would spend $20 billion on acquisitions through 2015, particularly targeting software companies in emerging markets. Since 2003 IBM has acquired more than 65 software companies and Unica is the ninth acquisition this year.

“The $480 million purchase follows a typical pattern of acquisitions for IBM – focusing on increasing the software revenue base with a minimum of risk,” wrote industry analyst Allan Krans at Technology Business Research, in a report on the deal. “The fact that Unica is already profitable and has an existing customer base of more than 1,500 will make the acquisition immediately accretive both to IBM’s software revenue and profit growth.”

Krans noted that IBM itself has been using Unica’s NetInsight software since November 2009.

Unica has on-demand and on-premise applications for large businesses and SMBs. It also has an active program for resellers and distributors, and in the conference call Hayman said IBM would continue to grow that ecosystem. Unica’s Website lists Amberleaf, BI Insight, Expresso, Pinpoint Systems Corp., Quaero and Slalom Consulting among its channel partners.

Unica has more than 1,500 customers, including Aramark, Best Buy, eBay, Starwood and U.S. Cellular. For the first three quarters of its fiscal 2010 ended June 30 Unica reported net income of $3.3 million on sales of $84.8 million.

Unica’s 500 employees will be integrated into IBM’s Software Solutions Group, IBM said, and will complement the company’s 5,000-staff Business Analytics and Optimization Consulting organization.