IBM Acquires Neudesic for Undisclosed Amount

Technology major International Business Machines Corporation (NYSE: IBM), popularly known as IBM, recently announced that it has acquired cloud services consultancy Neudesic. The financial terms of the deal have been kept under wraps.

Following the news, shares of the company declined marginally to close at $129.70 in Tuesday’s extended trading session.

Strategic Impact

IBM has been aggressively strengthening its hybrid multi-cloud services with notable acquisitions. Notably, cloud services technology, skills and capabilities are in high demand among corporations that view digital transformation through application development, modernization and data capabilities, powered by the cloud playing a critical role in achieving their objectives.

IBM’s acquisition of Neudesic is aimed at serving these clients better. Neudesic provides digital transformation services across advisory, application development, cloud migration, DevOps, integration, data engineering, data visualization and hyper-automation with specialization in the Microsoft Azure platform.

Management Commentary

The Senior Vice-President of IBM Consulting, John Granger, said, “As one of the leading cloud platforms, Microsoft Azure is key to many of our clients’ ability to modernize and innovate. Neudesic adds deep Azure cloud, data engineering and data analytics expertise to accelerate our clients’ hybrid cloud journeys. This builds upon IBM’s prior acquisitions of cloud transformation capabilities last year.”

Stock Rating

Recently, Jefferies analyst Kyle McNealy reiterated a Buy rating on the stock with a price target of $165, which implies upside potential of 27% from current levels.

Consensus among analysts is a Moderate Buy based on 6 Buys, 6 Holds and 2 Sells. The average IBM stock prediction of $147.23 implies upside potential of 13.3% from current levels. Shares have gained 13.3% over the past year.

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