IBM to acquire Internet Security Systems for $1.3 billion

Our Corporate Bureau
23 August 2006

The acquisition is subject to approval by shareholders of Internet Security Systems Inc and regulators. The transaction is expected to close in the fourth quarter of 2006.

ISS provides security solutions to some of the world's leading companies and governments, helping to protect against internet threats across networks, desktops and servers. ISS software, appliances and services monitor and manage network vulnerabilities and rapidly respond to potential threats.

This acquisition will bolster Atlanta-based IBM's strategy to utilise IT services, software and consulting expertise to automate labour-based processes into standardised, software-based services that help clients optimise and transform their businesses.

ISS's product line and extensive expertise complements IBM's long-standing security research efforts, consulting and managed service delivery capabilities, which currently provide security solutions to thousands of IBM's clients. ISS will join IBM as a business unit within IBM Global Services' Security organisation.

ISS claims to have 11,000 customers that include 17 of the world's largest banks. The company earned a profit of $38.5 million on revenues of $330 million last year. The company expects this year''s revenue to surpass $350 million.

IBM has agreed to buy three public companies this month alone. Two weeks ago it reached a pact to buy document-management software provider FileNet Corp. for $1.6 billion. On August 3 IBM agreed to spend $740 million for MRO Software Inc., which helps industrial companies track physical assets.