IBM will purchase Software Engineering for $9.5 billion in cash and stock, its largest acquisition to date.
The deal, which was announced Monday by Chief Executive Ginni Rometty and Chief Financial Officer Kevin Kostas, will help the company strengthen its software engineering offerings and accelerate the pace of product development, according to a release.
The company will also pay an initial $7 billion in stock-based compensation, the company said.
The acquisition of Software Engineering comes as IBM continues to strengthen its product development capabilities and increase its software engineers, according the release.
IBM plans to use the acquired company’s software engineering services to improve its software, including software to manage customer accounts and product management systems, the release said.
IBM’s software teams will continue to be trained in the fundamentals of software engineering and software testing, the report said.
Rometty, who is responsible for strategic planning and business development, said the acquisition will help IBM further improve its ability to deploy its technology across IBM’s various businesses and businesses that have a large software engineering workforce.
The Software Engineering acquisition is expected to help IBM achieve its goal of deploying more than 10% of its software products in the next five years.
The deal will also help IBM accelerate the rate of product delivery to customers, the statement said.IBM’s software engineers have traditionally had to learn and master new technologies and new business models.
The move is part of IBM’s efforts to strengthen the software engineering skills of its teams.
The announcement comes just days after IBM said it had closed a deal with Oracle for a software development and testing and engineering firm.IBMS has a software engineering team that’s been working on software solutions for the cloud and enterprise, according its announcement.
The firm has more than 20,000 software engineers working on new applications and technologies, according IBM.