IBM to Spend $20 Billion on Acquisitions

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ibmAccording to an article in today’s BusinessWeek [online edition], IBM is rolling out a plan to roll through $20 billion on acquisitions by 2015.  IBM CEO Sam Palmisano announced the spending plan in order to boost earnings by focusing on software and services.

Operating earnings will jump to at least $20 a share by 2015 from $11.35 or more this year, helped by cost savings and software demand,” Palmisano said in a meeting with investors in New York today.

In the eight years since Palmisano took over, he’s spent roughly $20 billion on 100 purchases.  The new plan signals an interesting uptick in a seemingly aggressive existing plan. This is an interesting strategy overall.  Amid the recession, he bought back shares and cut quite a few jobs.

Well, investers seemed to like what he had to say.  “IBM, based in Armonk, New York, climbed $4.46, or 3.5 percent, to $131.35 at 12:27 p.m. in New York Stock Exchange composite trading. It earlier rose as high as $131.75 for the biggest intraday gain since July 17. The world’s largest computer-services provider’s shares had fallen 3.1 percent this year before today.”