IBM to Buy Unica for $480 Million

By ADAM CANCRYN And TESS STYNES

International Business Machines Corp. agreed to acquire marketing software maker Unica Corp. for about $480 million, a move aimed to help the technology giant offer customers tools to create better-targeted marketing campaigns.

IBM is offering $21 a share to Unica shareholders, more than double Thursday's closing price on the Nasdaq Stock market and the highest level the stock has ever seen.

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Astute Solutions Acquires Gamma Engineers. Access thousands of business sources not available on the free web. Learn More.IBM's focus has been shifting to higher-margin software business to keep profit growing. IBM has been building up in the space, spending more than $11 billion in the past five years. The Unica deal, set to close in the fourth quarter, follows its recent acquisition of Coremetrics Inc., a company that helps target online marketing.

Unica, based in Waltham, Mass. and founded in 1992, sells software that automates the process of predicting customer preferences, designing ad campaigns based on that information and measuring how effective the campaigns are.

IBM already uses Unica's services and shares a number of clients, including Nordstrom Inc. and Best Buy Co. "There was one clear leader in the space, and it was Unica," said Craig Hayman, IBM's general manager for Industry Solutions.

Unica's 500 employees will be integrated into IBM's software division, where they will join its analytics unit, which includes 5,000 consultants and a network of analytics centers. Mr. Hayman said Unica's chief executive and founder, Yuchun Lee, will remain and become the segment's business leader once the deal is finalized.

Unica had a loss of $22.5 million on revenue $100.6 million in the fiscal year ended Sept. 30, 2009. The company has swung to the black in each of the past three quarters as revenue has been rising of late.

IBM, which is based in Armonk, N.Y., last month reported difficulty expanding its sales in the second quarter as currency pressures and an unexpected drop in contract signings in its big outsourcing business weighed on results.

Write to Tess Stynes at tess.stynes@dowjones.com

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