IBM Corp.’s $750 million bid last week for Swedish business software maker Telelogic AB,with its Americas headquarters in Irvine,would be Big Blue’s second big buy in Orange County in the past year.
In October, IBM wrapped up its $1.5 billion buy of Costa Mesa’s FileNet Corp.
The Telelogic deal, which still needs shareholder approval in Sweden, wouldn’t be as big as FileNet.
“FileNet was the fourth-largest M & A; transaction that IBM had ever done,” said Lee Roberts, general manager of IBM’s enterprise content management software group, which includes FileNet.
But IBM would add 85 people and $100 million in yearly sales from Telelogic North America Inc. in the Irvine Spectrum.
The deal would give IBM nearly 2,200 workers in OC.
In all, Telelogic has yearly sales of $200 million and about 1,000 workers worldwide.
The company makes software that others use to develop their products. Customers include Boeing Co., General Motors Corp. and Sprint Nextel Corp., which are handled from Irvine.
Locally, the deal would add to a growing outpost for Big Blue. FileNet’s five-building campus became the headquarters for an IBM unit that services and sells content management software, used by businesses to manage various types of data.
Before last year, IBM did sporadic buying here.
In 2002, IBM paid an estimated $200 million for Irvine-based Access360 Inc., then a software startup with about 130 workers.
Access360 became part of IBM’s Tivoli software unit and has been folded into FileNet’s campus.
IBM said at recent meeting with analysts that it wants software to make up half of pre-tax profits by 2010.
Software made up some 40% of IBM’s $9 billion in 2006 profits.
“IBM is increasingly relying on the software group as its engine of growth,” spokeswoman Karen Lilla said.
Software was 19% of IBM’s $91 billion in revenue last year.
Gross margins on software hovered around 83% in the past year, higher than any other division by more than 30%, according to company filings.
Telelogic’s board has given its thumbs up to a sale. IBM’s offer is about 20% more than what the company was trading at before it entered acquisition talks in late May.
Shareholders are set to vote on the offer in July. A deal could close in the third quarter.
Some analysts speculate another big software suitor could emerge with a rival offer.
Telelogic would be become part of IBM’s rational software unit, which helps businesses streamline software for efficiency.
IBM said it plans to offer “relevant key people” from Telelogic jobs as part of a bonus plan to be laid out after the deal closes.
For a while in 2005 and last year, Irvine was Telelogic’s operational headquarters with the appointment of a local chief operating officer for the entire company.
Scott Raskin, who had been one of only a handful of top executives not based in Sweden, left in mid-2006 to become chief executive of San Francisco software maker Mindjet Corp.
Susan Boers took over for Raskin as president of Telelogic’s Americas, working from Irvine and Reston, Va.
