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Acquisitions & Divestitures
 3 Months Ended
Mar. 31, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Acquisitions & Divestitures Acquisitions & Divestitures:
Acquisitions
Purchase price consideration for all acquisitions was paid primarily in cash. All acquisitions, unless otherwise stated, were for 100 percent of the acquired business and are reported in the Consolidated Statement of Cash Flows, net of acquired cash and cash equivalents.
During the three months ended March 31, 2025, the company completed two acquisitions within the Software segment and one acquisition within the Consulting segment at an aggregate total purchase price of $8,017 million. These acquisitions are expected to enhance the company’s portfolio of products and services capabilities and further advance IBM’s hybrid cloud and AI strategy.
At March 31, 2025, the remaining cash to be remitted by the company related to 2025 acquisitions was not material.
The following table reflects the purchase price related to these acquisitions and the resulting purchase price allocations as of March 31, 2025.
(Dollars in millions)Amortization
Life (in years)
HashiCorp, Inc.
 (HashiCorp)
Other
Acquisitions
Current assets (1)
$1,451 $66 
Property, plant and equipment/noncurrent assets457 12 
Intangible assets:
 GoodwillN/A4,674 343 
 Client relationships
7-13
980 230 
 Completed technology
5-7
770 16 
 Trademarks
2-7
85 4 
Total assets acquired$8,417 $671 
Current liabilities477 26 
Noncurrent liabilities507 61 
Total liabilities assumed$984 $87 
Total purchase price$7,433 $583 
(1)Include $929 million of cash and cash equivalents and $331 million of short-term marketable securities acquired from HashiCorp.
N/A – not applicable
The goodwill generated from these acquisitions is primarily attributable to the assembled workforce and the expected synergies from the integration of the acquired businesses. The identified intangible assets are amortized on a straight-line basis over their useful life which approximates the economic life of the assets.
The valuation of the assets acquired and liabilities assumed is subject to revision. If additional information becomes available, the company may further revise the purchase price allocation as soon as practical, but no later than one year from the acquisition date.
HashiCorp — On February 27, 2025, the company completed the acquisition of all of the outstanding shares of HashiCorp. IBM’s and HashiCorp’s combined portfolios will help clients manage growing application and infrastructure complexity and create a comprehensive end-to-end hybrid cloud platform designed for the AI era. HashiCorp's shareholders on record immediately prior to the effective time on the closing date received $35 per share in cash, representing a total equity value of approximately $7.2 billion. The following table reflects the consideration paid related to the acquisition.
(Dollars in millions)
Total Consideration (1)
Cash paid for outstanding HashiCorp common stock
$7,212 
Cash paid for HashiCorp equity awards
178 
Cash consideration
$7,390 
Fair value of stock-based compensation awards attributable to pre-acquisition services
40 
Settlement of pre-existing relationships
3 
Total consideration
$7,433 
(1)As part of the assets acquired, the company received $929 million of cash and cash equivalents and $331 million of short-term marketable securities from HashiCorp.
Goodwill of $4,531 million and $143 million was assigned to the Software and Consulting segments, respectively. It is expected that none of the goodwill will be deductible for tax purposes. The overall weighted-average useful life of the identified amortizable intangible assets acquired was 9.8 years. In connection with the acquisition, the company issued and assumed 1.7 million stock awards with a fair value of $381 million. For the three months ended March 31, 2025, the impact of these stock awards was not material on the company's stock-based compensation cost. The acquisition will be integrated into the Software segment.
Other Acquisitions — Goodwill of $343 million was assigned to the Consulting segment. It is expected that 6 percent of the goodwill will be deductible for tax purposes. The overall weighted-average useful life of the identified amortizable intangible assets acquired was 6.8 years.
Transaction Closed in Second-Quarter 2025 — On April 2, 2025, the company completed an acquisition within the Consulting segment which is not expected to have a material impact on the company's Consolidated Financial Statements.
Transaction Announced — On February 25, 2025, the company announced its intent to acquire a provider of enterprise-grade databases to build and deliver Generative AI applications. The acquisition is expected to close in the second quarter of 2025. Upon closing, the acquisition will be integrated into the Software segment.