IBM Corp. announced on Monday that it is buying AT&T Inc.’s Sterling Commerce unit for $1.4 billion. This unit makes software that aids businesses buy and sell to each other.
IBM is based in Armonk, N.Y, and AT&T is based in Dallas.
This is IBM Corp.’s largest accomplishment since it bought business software maker Cognos in 2008.
IBM said the deal accompaniments its portfolio of business process consolidation and transaction software portfolio, which grew more than 20 percent in the first quarter of 2010.
Sterling runs “collaboration networks” where companies can interact with vendors. IBM and AT&T said, Sterling has 18,000 clients worldwide. H.J. Heinz Co., Motorola Inc., Boise Cascade LLC and Boston Market Corp. are some of the customers included in the list.
AT&T Inc. paid $3.9 billion for Sterling in 2000. AT&T Inc was then called SBC Communications.
The unit, which is based in Dublin, Ohio, has little connection to AT&T’s main telecommunications business and has maintained its own brand.
AT&T spokeswoman McCall Butler said AT&T’s business has changed since 2000, and Sterling is “no longer core to the company’s long-term strategic objectives.”
Butler said with the help of IBM’s purchase price, operating contributions and tax benefits, AT&T will have recouped most of its investment in Sterling. AT&T anticipates the deal to lead in a one-time pretax gain of approximately $750 million when it draws in the second half of the year.