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ARMONK, N.Y. - 21 Feb 2003: IBM (NYSE:IBM - News) today announced the completion of its $2.1 billion acquisition of Rational Software Corp. (NASDAQ:RATL - News).
The acquisition, announced on Dec. 6, 2002, was completed before the market opened today.
Rational provides open, industry standard tools, best practices and services for developing business applications and building software products and systems, including embedded software for devices such as cell phones and medical systems.
"Rational is an important element of our e-business on demand initiative," said Steve Mills, IBM senior vice president and group executive, IBM Software Group. "Rational's complete, open software development platform can improve the speed, quality and predictability of software projects. It's a perfect complement to our existing four brands - WebSphere, DB2, Lotus and Tivoli."
Mike Devlin, who previously was Rational's CEO, is the general manager of the new division reporting to Steve Mills.
The net impact on earnings per share for the first quarter and full-year 2003 is expected to be immaterial. Operating income from Rational and associated benefits would be roughly offset by purchase accounting charges.
Rational shareholders approved the acquisition on Jan. 22, 2003, and the required worldwide government regulatory approval process has been completed.
Rational, with customers in 89 countries and more than 3,400 employees, estimates that more than 600,000 software developers use its software tools. Rational will be integrated into IBM as the fifth brand of IBM Software Group, a $13 billion business in 2002. IDC estimates the market opportunity for application development software will grow from $9 billion in 2002 to $15 billion in 2006.
Equiserve Trust Company will be the paying agent for the Rational transaction.
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Information Management, Lotus, Tivoli, Rational, WebSphere, Open standards, open source