One day after agreeing to purchase i2, IBM signs an agreement to acquire Algorithmics, a risk analytics firm focused on the financial sector.
has announced a definitive agreement to acquire Algorithmics
, a financial risk
analytics firm, for $387 million.
move to acquire Algorithmics comes one day after IBM signed an agreement
to acquire i2
, a provider of intelligence analytics. For its part,
Algorithmics is a risk analytics firm with operations in
Toronto. Algorithmics' risk analytics software, and content and advisory
services are used by banking, investment and insurance businesses to help
assess risk, address regulatory requirements and make more insightful business
decisions. The company's offerings fit well with those of i2, IBM officials
said. Algorithmics is a member of Fitch Group, which is majority-owned by
Fimalac, a holding company based in Paris.
acquisition expands IBM's business analytics capabilities in the financial
services industry by helping clients quantify, manage and optimize their risk
exposure across a range of financial risk domains, including market, liquidity,
credit, operational and insurance, as well as economic and regulatory capital,
to a recent IBM
Institute of Business Value survey
of 1,900 global CFOs, nearly half
indicated that their finance organizations are not effective in the areas of
strategy, information integration, risk and opportunity management. The
roles of financial officers across all industries are evolving-drawing them
into more frequent boardroom conversations about forecasts, profitability and
exposure to risks. The survey reveals that the importance of integrating
information has more than doubled, mirroring the exponential rise in
information volume and velocity within businesses today. Financial officers are
becoming more involved in mitigating corporate risk in all its many
forms-whether strategic, operational, legal or environmental, IBM said.
the combination of IBM and Algorithmics analytics, companies can measure and
assess operational risk associated with lending processes, and market and
credit risk exposures. Having this type of transparency and granular
insight of financial risk in advance can help organizations meet new regulatory
than 350 clients, including 25 of the top 30 banks and more than two-thirds of
the Chief Risk Officer Forum (CRO Forum) of leading insurers, use Algorithmics
analytics software and advisory services, IBM officials said. Clients include
The Allianz Group, BlueCrest, HSBC, Nedbank, Nomura, Societe Generale and
economic environment demands that financial institutions have more cash on
hand, a better understanding of their financial standing and the ability to
deliver more transparency to stakeholders," said Rob Ashe, IBM's general
manager for Business Analytics, in a statement. "Combining Algorithmics'
expertise with IBM's deep analytics portfolio will allow clients to take a more
holistic approach to managing risk and responding to economic change across
agreement with Algorithmics reinforces the fact that companies are looking to
reduce independent silos to gain an enterprisewide view of risks for strategic
planning, operations and new growth opportunities, the company said.
is increasingly important to deliver integrated solutions that provide a deep
understanding of risk and enable effective decision support at the same time as
meeting rapidly evolving regulatory requirements," said Michael Zerbs,
president and chief operating officer at Algorithmics, in a statement. "The
need to have the right information at the right time is fundamental to
developing and managing business strategies. Combining Algorithmics' thought
leadership, technology, content and services with IBM's globally recognized
analytics business will help a broader group of clients improve their business
performance based on a deeper understanding of risk."
risk analytics software and services combined with IBM's acquisition of OpenPages
recent investments in predictive analytics will provide clients with a broad
range of business analytics solutions, IBM said. Algorithmics' risk advisers
will enhance IBM's Business Analytics and Optimization practice. The Business
Analytics and Optimization team has more than 8,000 consultants, including 200
mathematicians with more than 500 patents, and a network of analytics solution
centers, backed by an overall investment of more than $14 billion in
acquisitions in the last five years. Algorithmics' focus on credit, market and
liquidity risk, as well as key customers in operational risk, will strengthen
and expand IBM's risk consulting services.
acquisition is subject to applicable regulatory clearances and other customary
closing conditions. With the closing of this acquisition, approximately 900
Algorithmics employees will join IBM's Software Group, the company said.