UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: April 4, 2019
(Date of earliest event reported)
INTERNATIONAL BUSINESS MACHINES
CORPORATION
(Exact name of registrant as specified in its charter)
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New York |
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1-2360 |
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13-0871985 |
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(State of Incorporation) |
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(Commission File Number) |
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(IRS employer Identification No.) |
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ARMONK, NEW YORK |
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10504 |
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(Address of principal executive offices) |
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(Zip Code) |
914-499-1900
(Registrant’s telephone number)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 8.01 Other Events.
On April 4, 2019, IBM announced it has entered into a definitive agreement with Centerbridge Partners, in which Centerbridge will acquire select marketing platform and commerce offerings from IBM. The press release is Exhibit 99.1 of this Form 8-K. Exhibit 99.2 contains information about this transaction that has been posted on IBM’s Investor Relations website (www.ibm.com/investor/).
IBM’s web site (www.ibm.com) contains a significant amount of information about IBM, including financial and other information for investors (www.ibm.com/investor/). IBM encourages investors to visit its various web sites from time to time, as information is updated and new information is posted.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are being filed as part of this report:
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Exhibit No. |
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Description |
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99.1 |
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99.2 |
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PRESS RELEASE
Centerbridge Partners to Acquire IBM’s Marketing Platform and Commerce Software Offerings to Form Standalone Marketing and Advertising Technology Company
Strategic Purchase by Centerbridge Funds to Enable Next Generation of Marketing and Commerce Software Solutions; Accelerates Mission to Bring AI to the CMO
Post-Close, Current Executive Team to Continue Leading Business
NEW YORK and ARMONK, N.Y., April 4, 2019 — Centerbridge Partners, L.P. (“Centerbridge”) and IBM (NYSE: IBM) today announced a definitive agreement under which funds advised by affiliates of Centerbridge will acquire IBM’s marketing platform and commerce software offerings (the “Company”). The transaction is expected to close in mid-2019, subject to completion of applicable regulatory reviews and customary closing conditions.
After closing, Centerbridge intends to form a standalone company that will deliver a modern, comprehensive portfolio of solutions to meet the CMO’s biggest challenges across marketing and advertising. The Company will announce a new name and brand identity, which will be launched after close.
The Company will be led by Mark Simpson as CEO, after the closing, along with other key IBM executives, and will move its headquarters to New York City. Mr. Simpson is currently Vice President, Offering Management and Strategy for the IBM Marketing Platform and Commerce offerings. He was previously the founder and president of Maxymiser, a recognized leader in customer experience optimization. Centerbridge plans to establish a board of directors for the new company, which will include independent members with deep marketing and software experience.
IBM’s marketing and commerce software offerings include:
· Campaign Automation
· Marketing Assistant
· Media Optimizer
· Customer Experience Analytics
· Content Hub
· Real-Time Personalization
· Personalized Search
· Universal Behavior Exchange
· Intelligent Bidder
· Price & Promotion Optimization
· Payments Gateway
The offerings today include marketing automation tools, marketing analytics, an AI-powered content management system, an open ecosystem connector, and robust services. Centerbridge will position the standalone company to lead the next generation of marketing and commerce software solutions, by further investing in AI, growing the marketing ecosystem, and giving marketers tools to protect user privacy.
“We are excited about this next chapter, which will enable us to build on the significant steps we have taken over the last few years to modernize the portfolio. Once closed, this transaction will help us accelerate our efforts to empower our clients to make smarter, more timely decisions in their marketing and advertising initiatives. We look forward to working with Centerbridge’s world-class team to ensure a smooth transition and position the business to drive the next generation of marketing clouds,” said Mr. Simpson.
Jared Hendricks, Senior Managing Director at Centerbridge, commented, “The Company is a demonstrated leader in offering AI-powered marketing solutions in an ever-evolving industry. We are deeply committed to advancing these compelling products through continued investment and intend to accelerate existing product roadmaps and introduce new categories. Following close, we look forward to working with existing business partners and the Company’s highly talented team, including Mark Simpson, whose industry experience and significant domain expertise make him the perfect fit to lead this business during its next phase of growth.”
“IBM plans to work with Centerbridge on cloud and AI to help our customers continue to transform in this new era of technology, and we hope to find additional ways to continue collaborating for the longer term,” said Inhi Cho Suh, General Manager, IBM.
Financial terms and conditions of the transaction were not disclosed.
About Centerbridge Partners, L.P.
Centerbridge Partners, L.P. is a private investment management firm employing a flexible approach across investment disciplines — from private equity to credit and related strategies, and real estate — in an effort to find the most attractive opportunities for our investors and business partners. The firm was founded in 2005 and as of December 2018 has approximately $28 billion in capital under management with offices in New York and London. Centerbridge is dedicated to partnering with world-class management teams across targeted industry sectors and geographies to help companies achieve their operating and financial objectives. For more information, please visit www.centerbridge.com.
About IBM
For more information, please visit www.ibm.com.
Contacts
For Centerbridge:
Jeremy Fielding / Anntal Silver
Kekst CNC
212-521-4800
jeremy.fielding@kekstcnc.com / anntal.silver@kekstcnc.com
For IBM:
Hanna Smigala
IBM Media Relations
203-512-5497
smigala@us.ibm.com
IBM to Divest Select Software Products to Centerbridge Partners
4 April 2019
On April 4, 2019, IBM announced it has entered into a definitive agreement with Centerbridge Partners, in which Centerbridge will acquire select marketing platform and commerce offerings from IBM. A copy of the announcement press release is available [here].
This action reflects IBM’s ongoing commitment to disciplined financial management and investment prioritization, and will result in an improved revenue growth and margin profile in IBM’s software business.
Strategic Rationale
IBM has been reshaping its business to address the evolving needs of its clients, enabling their journeys to AI and cloud to advance their business transformations. The company has been increasing investments in technology and industry expertise to deliver integrated offerings in areas like AI and analytics, hybrid cloud, security, and blockchain — the emerging, high-value segments of the IT industry.
To ensure the company is delivering shareholder value while addressing client requirements, IBM continually reallocates capital and prioritizes investments, considering factors such as the attractiveness of the market, differentiation of offerings, and the importance to IBM’s integrated value proposition.
IBM’s marketing and commerce assets have been increasingly sold as standalone products, with little integration with IBM’s broader capabilities. In December of 2018, IBM announced the divestiture of its collaboration and on-premise marketing and commerce software products to HCL, leveraging an existing development partnership for those offerings. Today, IBM is announcing the divestiture of the balance of its marketing and commerce products to Centerbridge, a private investment management firm, which intends to form a standalone company for this business.
Timing and Financial Implications
The transaction is expected to close in mid 2019, subject to the satisfaction of applicable regulatory reviews and customary closing conditions.
Financial terms and conditions of the transaction are not disclosed.
The divested content was previously reported in IBM’s Cognitive Solutions segment. With IBM’s new segment reporting for 2019, it will now be reflected in the “Other” category, consistent with the previously-announced divested software and services content.
Because the revenue from these products has been declining and the margin is below IBM’s software margin, the divestiture results in an improved revenue trajectory and margin profile for IBM’s software business. This transaction is expected to have a minimal impact to IBM’s 2019 earnings per share.