IBM (NYSE:IBM) announced on Monday that it will acquire employee recruiting and retention software solution developer Kenexa (NYSE:KNXA) for $1.3 billion.
Under the terms of the cash transaction, IBM will pay $46 a share, a 42% premium over Kenexa’s last share closing price.
The acquisition will be completed during the fourth quarter, the Wall Street Journal noted.
Predictably, shares of Kenexa jumped mote than 41% in Monday afternoon trading to just under $46 a share, while IBM shares dipped about 1%, falling below $197 a share.
Kenexa recently posted a second-quarter loss driven by increasing costs. Its revenue increased more than Wall Street had anticipated, however.
Last month, IBM reported second-quarter earnings that topped analysts’ estimates, but revenue fell short of expectations.
Company officials said social networking solutions were driving advances in personnel management software. They noted that the integration of Kenexa’s on-demand human resources software would expand IBM’s service offerings to business clients.