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August 27, 2012

IBM to Acquire Social Business Firm Kenexa for $1.3 Billion

By Erin Harrison, Executive Editor, Cloud Computing

In a move to help bolster its business-analytics software, IBM (News - Alert) will acquire social business company Kenexa Corporation for $46 per share – or a net price of approximately $1.3 billion. IBM officials expect the transaction to close in the fourth quarter of 2012.

The acquisition boosts IBM’s social business capabilities that will help its customers gain “actionable insights” from the vast amounts of information generated from social networks every day, according to Alistair Rennie, general manager, social business, IBM.

“Every company, across every business operation, is looking to tap into the power of social networking to transform the way they work, collaborate and out innovate their competitors,” Rennie said in a company statement. “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.”

Kenexa, which is based in Wayne, Pa., provides recruiting and talent management services through cloud-based technology and consulting services, providing solutions to “engage a smarter, more effective workforce across their most critical business functions,” according to the statement.

IBM said Kenexa complements the company’s strategy of “bringing relevant data and expertise into the hands of business leaders within every functional department, from sales and marketing to product development and human resources.”

The adoption of social business technology is supporting the growth of big data and the need for analytics in the enterprise. A recent global IBM study revealed that 57 percent of CEOs identified social business as a top priority and more than 73 percent are making significant investments to draw insights into available data. The survey also revealed that 70 percent cite human capital as the single biggest contributor to sustained economic value.

A social media shift is occurring in the enterprise as business leaders look for ways to generate real value through the use of social technologies to evolve their front-line business operations. According to Forrester Research (News - Alert), the market opportunity for social enterprise apps is expected to grow at a rate of 61 percent through 2016.

“The customer is the big winner in all this because the combination of our two organizations will deliver more business outcomes than ever before,” said Rudy Karsan, CEO of Kenexa. “Together, Kenexa and IBM will be unmatched in the industry, offering solutions that extend from strategy to the technology platform to the delivery of services for clients.”

Kenexa has 8,900 customers across a variety of industries, including financial services, pharmaceuticals, retail and consumer, including more than half of the Fortune 500. Customers include Starbucks Corp., General Electric Co. and Boeing (News - Alert) Co.

Kenexa shares jumped 41 percent to $45.75 at 9:42 a.m. in New York, Bloomberg (News - Alert) reported. They had climbed 21 percent in 2012 through the end of last week. IBM, up 7.6 percent this year, fell less than 1 percent today to $196.85.




Edited by Juliana Kenny
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