IBM to buy software firm SPSS for $1.2 billion

IBM plans to buy Chicago-based tech services company SPSS for $1.2B in cash, it said. SPSS shareholders will receive $50 a share, a 42% premium to Monday's closing price of $35.09 on Nasdaq. SPSS provides predictive analytics software & services. Predictive analytics are used by companies to forecast future trends & spot shifts in consumer patterns, helping them control costs & use resources wisely. It said the deal will help expand its Info on Demand software portfolio & business analytics capabilities. Shares of SPSS jumped 41% in premarket trade to $49.50. The shares already enjoyed a gain of 30% this year. The deal values SPSS at about 25x analysts' estimated 2010 earnings per share, & the $50-per-share price reps an all-time high for the stock, topping its previous all-time top of $47.87. The deal is subject to SPSS shareholder approval & reg clearances & is expected to close later in the 2nd half of 2009, they said. Separately, IBM said it acquired closely held Ounce Labs, whose software helps companies reduce the risks & costs associated with security & compliance concerns. In May, IBM CFO, Mark Loughridge,said valuations of potential acquisition targets were attractive. IBM spent $20B buying over 100 companies since 2000, paying prices that range from as little as $50 million to as much as $5 billion.