IBM Makes Another Acquisition (IBM, UNCA)

IBM is buying another company.  International Business Machines Corp. (NYSE: IBM) announced the acquisition of a company called Unica Corporation (NASDAQ: UNCA) early this Friday.  The deal may sound small at a mere $480 million for a mega-cap company with more than $25 billion of liquidity to spare.  The issue is that Unica’s buyout premium is a whopping 120%.

Unica closed at $9.55 but the buyout price is $21.00 per share in cash.  IBM noted that the Unica acquisition will expand Big Blue’s ability to help organizations analyze and predict customer preferences and develop more targeted marketing campaigns.  Unica is said to have over 1,500 global customers in diverse sectors of financial services, insurance, retail telecommunications, travel and hospitality. Customers include Best Buy, eBay, ING, Monster, Starwood and US Cellular.

The merger is subject to Unica shareholder approval (and regulatory approval), although it is expected to close in the fourth quarter of 2010.  Unica shares closed at $9.55 on Thursday and the 52-week trading range is $6.13 to $11.00.  It had a tiny market cap of $205 million before the deal was announced.

This stock traded above $15.00 for a very short period in 2007, but since it has been public from late-2005 that was the high.  It would be hard to imagine that Unica shareholders would say that they deserve more in this high-premium buyout.

Another small enterprise analysis company gets gobbled up by the majors.

JON C. OGG