IBM has reached an agreement to divest its weather business to the private equity firm Francisco Partners. The transaction, for an undisclosed sum, involves the sale of assets belonging to The Weather Company, encompassing consumer-oriented elements like Weather.com and Storm Radar, as well as enterprise solutions tailored for sectors such as media and aviation.
Notably, IBM will retain ownership of its sustainability software division. The company intends to persist in utilizing The Weather Company’s weather data to enhance its software offerings centered on environmental insights. This environmental intelligence suite, integrated into IBM’s artificial intelligence (AI) and data platform, Watsonx, relies on a NASA-powered model.
Rob Thomas, Senior Vice President for Software at IBM, explained, “Over the last few years, we’ve evolved IBM to be a hybrid cloud and AI company. We regularly review our portfolio to make sure our business areas are core to that strategy.”
Additional details regarding the sale were not disclosed by IBM, and Francisco Partners has yet to provide a comment in response to queries.
Reports in April, as cited by The Wall Street Journal, indicated that IBM was exploring the sale of its weather business in a deal potentially exceeding US$1 billion ($1.56 billion) in value.
This divestiture reflects a broader trend in the tech industry this year, as companies take steps to mitigate the impact of decreased demand from cautious consumers and businesses concerned about inflation.
IBM, which fell short of revenue expectations in the second quarter of the year, had previously announced plans to lay off 3900 employees in January. Nonetheless, the company remains committed to bolstering its cloud offerings, having unveiled a US$4.6 billion all-cash acquisition of the technology spend-management platform Apptio in June.
Pending regulatory approval, the deal with Francisco Partners is anticipated to conclude in the first quarter of 2024.
