Pot, kettle, blue

20 September 2010 By Robert Cyran Follow @rob_cyran

Big Blue boss Sam Palmisano rubbished rival HP for overpriced acquisitions. Now his firm is paying $1.7 bln, a lofty 65 times expected 2010 operating profit, for data and analytics outfit Netezza. At this buzzinflated price, it will take fancy footwork to make the deal pay off.

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IBM on Sept. 20 said it had agreed to buy Netezza for about $1.7 billion after adjusting for cash, or $27 per share. The price is a 10 percent premium to where the company's shares closed on Sept. 17, but a 94 percent premium to their price on Aug. 13, the last trading day before Dell made a bid for 3PAR, a data storage rival of Netezza.

In early trading on Sept. 20, Netezza shares stood 3 percent above IBM's offer.

Netezza is a data warehousing and analytics firm. In the last four years, IBM has invested more than $12 billion in 23 analyticsrelated acquisitions. The company said earlier this year that it plans to spend $20 billion on M&A over the next five years.

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