COVID-19 Update

IBM’s Unica Acquisition Heats Up: M&A Talk In Automation Space

Last week’s announcement that IBM would acquire Unica Corp. for approximately $480 million fanned the flames that other acquisitions could be on the horizon in the automation space.

The acquisition, which is subject to Unica shareholder approval, applicable regulatory clearances and other customary closing conditions, is expected to close in the fourth quarter of 2010.

The IBM announcement emphasized the growing role automation is playing in today’s business world, stating: “Marketing professionals are increasingly investing in technology to automate and manage marketing planning and execution to help them better analyze customer preferences and trends and in turn, predict buying needs and drive relevant campaigns.”

The acquisition of Unica follows IBM’s recent buys of Sterling Commerce and Coremetrics and expands the company’s portfolio of software solutions designed to help companies “automate, manage, and accelerate core business processes across marketing, demand generation, sales, order processing and fulfillment.”

To meet this demand, IBM is assembling transformational capabilities designed to help clients create this consistent and relevant cross-channel brand experience to promote customer loyalty and satisfaction.  With sophisticated analytics and marketing process improvement, the combination of IBM and Unica will help clients streamline and integrate key processes including relationship marketing, online marketing and marketing operations.

"IBM understands the demands on today's organizations to transform core business processes in functions such as marketing with intelligence and automation," said Craig Hayman, General Manager, IBM Industry Solutions.  "Unica was a clear choice for IBM based on its power to automate a broad set of marketing capabilities and its established reputation for delivering customer success in marketing to organizations around the world."

Not surprisingly, the acquisition was welcome news among leading automation providers. Scott Olrich, CMO of Responsys, said the deal “validates the fact that advanced marketing solutions are a must-have for companies of all sizes.  It also shows that companies in this space are able to command a real premium in the financial world.”

Jon Miller, VP of Marketing at Marketo, added the acquisition “makes a lot of sense” for IBM. “They can accelerate their existing highly profitable data warehouse business,” Miller also pointed out that IBM’s aggressive acquisition track is likely to fuel further speculation. “There are a lot of people wanting to talk about consolidation in the marketing automation market and it’s sure to happen. There are enough vendors that we’re going to see more consolidation in the space. The market is accelerating and it’s moving from exotic to a must-have. I see a ton of potential ahead for this category.”

Bill Nussey, Silverpop’s CEO, pointed out that the deal “highlights the emerging importance of analyzing and acting on the behaviors of customers — and their linkages to revenues — as the primary driver for marketing programs.” The added attention to next generation marketing was also welcomed by Nussey. “It’s great to see growing attention being paid to marketing infrastructure, to the management of demand and to the importance of linking behaviors to revenue outcomes.”

Unica's 500 employees will be integrated into IBM’s Software Solutions Group, which includes a range of industry-focused offerings.  A publicly held company based in Waltham, MA, Unica is expected to expand IBM's ability to help organizations analyze and predict customer preferences and develop more targeted marketing campaigns.

Unica has more than 1,500 global customers including Best Buy, eBay, ING, Monster, Starwood and US Cellular.