Evercore ISI notes several media reports indicating that IBM is in discussions to acquire IT business management software company Apptio for $4.5B-$5B and says that strategically this asset aligns with IBM’s hybrid cloud/AI focus. The firm, which believes some of the capabilities related to cloud spend management are “particularly pertinent in an uncertain macro environment,” estimates Apptio could contribute about 1 point of year-over-year revenue growth while expanding the company’s revenue mix toward higher margin software revenue. Evercore has an In Line rating and $140 price target on IBM shares.
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