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Global Exchange to buy IBM services units

GXS says the added capabilities will boost customers' B2B strategies and tap into emerging applications such as RFID tags.

Global Exchange Services announced Thursday that it has signed a deal to purchase IBM's Electronic Data Interchange and Business Exchange Services business units for an undisclosed sum of money.

The business-to-business e-commerce software maker, also known as GXS, is best recognized as the operator of an electronic trading network that processes an estimated 1 billion transactions annually. Its B2B online exchange, officially known as Trading Grid, serves for many companies the same role that electronic data interchange was originally designed for--helping business partners communicate in real-time regarding issues such as inventory status or order placement.

Executives at GXS, a spinoff of General Electric based in Gaithersburg, Md., labeled the deal a major boost to Trading Grid, which the company relaunched at the end of September. Rowland Archer, GXS's chief technology officer, said the addition of IBM's capabilities will help customers further capitalize on existing B2B strategies and tap into the potential of emerging applications such as radio frequency identification tags.

"This is another step in the realization of global B2B e-commerce," Archer said. "A lot of companies develop software that helped to pioneer this space, but at the end of the day, it's all about the size of the connected trading community."

Along with the addition of an estimated 10,000 customers to Trading Grid, which currently serves about 30,000 companies, the executive said the merger will bolster GXS' global reach, increasing its presence in Latin America, Japan and Europe. When the buyout is complete, GXS will count about 75 percent of all Fortune 500 companies among its customers, he said. It currently serves just over 50 percent of that group.

The IBM divisions are to officially be acquired by Francisco Partners, Global Exchange's majority shareholder. Francisco Partners, a Menlo Park, Calif., equity firm, then plans to merge the IBM units with GXS over the next six months.

Following the acquisition, Gary Greenfield, chief executive of Global Exchange and an operating partner with Francisco Partners, will step into a new role as CEO of G International, a newly formed umbrella company that will oversee the combined IBM-GXS operations.

IBM representatives did not immediately return calls seeking comment on the deal. GXS did not comment on whether the merger would result in layoffs in either of the acquired business units.

GXS executives said the company will enter into a contract to provide Trading Grid's services to IBM and some of its channel partners, based on the deal.

In January, GXS acquired data synchronization specialist Haht Commerce in a $30 million deal.