M&A

30 November, 2009

UPDATE 2-IBM buys database security firm Guardium

* Price not disclosed, earlier reported at $225 mln

* Guardium helps monitor, protect databases from hackers (Adds share move, background on IBM)

NEW YORK, Nov 30 (Reuters) - IBM (IBM.N) said on Monday it had bought database security company Guardium, aiming to expand its software portfolio and help its business clients protect their databases from hacking and fraud.

International Business Machines Corp did not disclose how much it paid for the privately held company specializing in database monitoring, but Israeli financial newspaper TheMarker earlier reported the deal was worth $225 million.

IBM, which bought PwC Consulting from PricewaterhouseCoopers for about $3.5 billion in 2002 and sold its personal computer business to Lenovo Group Ltd (0992.HK) in 2005, has been shifting its focus from hardware to the more lucrative software and technology services.

Guardium will be incorporated into IBM's information management software portfolio, the companies said.

Guardium was founded in 2002, and network equipment maker Cisco Systems Inc (CSCO.O) was a strategic investor.

Its products help protect databases and automate corporate compliance auditing processes. The world's top five banks install its security platform, Guardium said in a recent press release.

The move comes as large-cap technology companies, including IBM rival Hewlett-Packard Co (HPQ.N), have stepped up acquisitions to expand their product portfolios.

IBM has said it plans to expand its services and software businesses, and analysts have said it has the cash to make more deals. It ended the third quarter with a cash balance of $11.5 billion, although it recently approved a new $5 billion stock buyback plan.

IBM shares rose 65 cents, or 0.53 percent, to close at $126.35 on the New York Stock Exchange.

(Reporting by Ritsuko Ando; Editing by Tim Dobbyn and Richard Chang) ((ritsuko.ando@thomsonreuters.com; +1 646 223 6084; Reuters Messaging: ritsuko.ando.reuters.com@reuters.net))

Source: http://www.reuters.com