IBM to Acquire Kenexa for $1.3B

by Christopher Freeburn | August 27, 2012 1:19 pm

IBM (NYSE:IBM[1]) announced on Monday that it will acquire employee recruiting and retention software solution developer[2] Kenexa (NYSE:KNXA[3]) 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[4].

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.

Endnotes:
  1. IBM: http://studio-5.financialcontent.com/investplace/quote?Symbol=IBM
  2. acquire employee recruiting and retention software solution developer: http://online.wsj.com/article/SB10000872396390444327204577615172263198682.html
  3. KNXA: http://studio-5.financialcontent.com/investplace/quote?Symbol=KNXA
  4. but revenue fell short of expectations: http://investorplace.com/2012/07/ibm-keeps-plugging-away-in-q2-earnings/

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