HashiCorp rises after IBM's $6.4 bln buyout deal

Hashicorp

25/04/2024 11:47

** Shares of cloud software vendor HashiCorp  HCP.O  up 4.6% at
$32.9 premarket after International Business Machines'  IBM.N 
buyout deal 
    ** Deal valued at $6.4 bln; IBM will pay $35/shr for
HashiCorp, a 11.3% premium to Wednesday's closing close and a
42.6% premium to Monday's closing price 
    ** IBM to expand its cloud-based software products to tap
into an AI-powered boom in demand
    ** IBM to fund the deal by cash on hand and would add to
adj. core profit within the first full year of closing, expected
by the end of 2024
    ** "IBM is the most logical & synergistic fit for HCP given
co's deep roots around open-source and hybrid cloud enablement"
- TD Cowen
    ** Brokerage TD Cowen also notes "$35 offer to be a high
premium and healthy multiple & don't believe others would outbid
IBM" 
    ** IBM's shares down 8.7% to $184.1 premarket; co missed Q1
rev estimates
    ** HCP stock gained nearly 25% since news broke about co's
potential sale in March while it was up 33% YTD as of last close
    

 (Reporting by Pranav Kashyap in Bengaluru)
 ((Pranav.Kashyap@thomsonreuters.com;))