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IBM snaps up another partner

The company plans to buy Candle, a longtime partner that sells software for managing back-end corporate systems.

Martin LaMonica Former Staff writer, CNET News
Martin LaMonica is a senior writer covering green tech and cutting-edge technologies. He joined CNET in 2002 to cover enterprise IT and Web development and was previously executive editor of IT publication InfoWorld.
Martin LaMonica
2 min read
IBM said Thursday it will acquire longtime partner Candle to further build its roster of management tools.

Candle, based in El Segundo, Calif., sells software for managing back-end corporate systems, including tools designed to improve mainframe application performance. The company, which has been an IBM business partner since its founding in 1976, sells management tools that work with many of IBM's software products, such as its WebSphere Java server software line, DB2 database and Tivoli management suite.

IBM said it would sell Candle's tools as a complement to its own middleware products. Robert LeBlanc, general manager of IBM's Tivoli division, will lead the integration of Candle's products into IBM.

The acquisition is a response to market demand for more fully functional tools, LeBlanc said.

"Customers want end-to-end solutions. They don't want 15 different vendors who provide point solutions, and the customer becomes the integrator," LeBlanc said.

IBM will seek to integrate Candle's mainframe-based tools for tracking system performance with its Tivoli monitoring software. Big Blue will also further tie Candle's tools for managing distributed systems to IBM's database and server software products, the company said.

Financial terms of the deal were not disclosed.

Candle has about 3,000 customers and about 800 employees. The company would not disclose its revenue, but Candle President Andy Mullins said that it is profitable.

Paul Crisci, a managing director at merger-and-acquisition adviser Broadview, acted as a financial adviser to Candle in the IBM deal. He said the transaction reflects the quickening pace of mergers and acquisitions right now, particularly in the area of infrastructure management.

"From a timing perspective, this was a wonderful time for selling the company," said Crisci, who predicted that the deal will be "one of the largest transactions this year" in mergers and acquisitions in the software industry.

The acquisition of Candle is the latest in a string purchases made by IBM's nearly $15 billion software group in the past year. In March, IBM bought supply chain company Trigo. In December, it acquired document management software company Green Pastures. Both companies were also IBM partners.

IBM expects the latest acquisition to be completed in the second quarter.