Monday, December 22, 2014

IBM buys Kenexa software, Wayne, for $1.3 billion

HR software maker going out at $46/share, its highest price

IBM buys Kenexa software, Wayne, for $1.3 billion

UPDATE: The Kenexa deal "fits" with IBM's planned $20 billion in software acquisitions and boosts IBM's human-resources business at a time when hiring interest is growing, writes  Joseph D. Foresi, analyst at Janney Capital Markets in Philadelphia. 

IBM is paying 3.7x Kenexa sales, less than SuccessFactors and Taleo fetched in recent deals, Foresi told clients.  IBM generally keeps 36 cents of every dollar in software sales (pre-tax), while Kenexa only keeps about 12 cents.  On the other hand, Kenexa is growing by a healthy 25%/year.

EARLIER: Kenexa Corp., the Wayne-based, publicly-traded recruiting and hiring software firm, says IBM Corp. has agreed to buy the company for $1.3 billion, $46 per share.  Statement here. Inquirer's Jane Von Bergen writes more here.

The sale price, about $13 higher than the stock's recent trading level, represents an all-time high for Kenexa since its 2005 IPO. Major owners include the Fidelity, Vanguard and Wanger investment funds, and Kenexa boss Nooruddin Karsan. Kenexa employs about 2,700, including 239 at the Wayne headquarters. Unclear how many IBM will cut, or add.





 

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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