IBM is buying human resources management company Kenexa Corp for about US$1.3 billion, adding to its stable of cloud-based software.
The announcement on Monday sent Kenexa’s stock to the highest point since it began trading in mid-2005.
Kenexa’s HR software is designed to help companies recruit workers and manage employees with the help of networking tools similar to the ones that connect people on Facebook and LinkedIn.
The Wayne, Pennsylvania, company says it has more than 8,900 customers and employs about 2,800 workers. IBM said that it plans to continue to support Kenexa’s clients while also giving them access to IBM’s offerings.
The acquisition helps make the Armonk, New York, company more competitive with database maker Oracle Corp and German business software maker SAP AG, said Rick Sherlund of Nomura Equity Research.
Oracle and SAP have both recently been buying “cloud computing” companies. Such technology allows businesses to run software remotely rather than installing software in-house.
IBM is hoping to draw upon Kenexa’s products and expertise to develop more social networking tools for corporate customers trying to foster better communication among their employees.
Through the first half of this year, IBM had completed eight other acquisitions at a total cost of US$2.2 billion.
IBM Corp said that it will pay US$46 per Kenexa share, a 42 percent premium to the company’s closing price of US$32.39 on Friday.
IBM stock slipped US$1.56 to US$196.21.
Kenexa’s board unanimously approved the deal, which is expected to close in the fourth quarter. It still needs approval from the company’s shareholders and regulators.