Cloud Software Buyout: IBM Snags Kenexa (KNXA) for $1.3 Billion by TechStockProspector

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									Robert DeFrancesco’s
TechStockProspector.com
August 27, 2012


Cloud Software Buyout: IBM Snags Kenexa for $1.3 Billion
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*Strategy Update: Q2 tech earnings
*NetSuite firing on all cloud cylinders
*OpenTable delivers tasty results
*Unlocking value in Symantec
*Qlik Technologies navigates European slowdown
*Guidewire Software moves insurers to the cloud
*Is Akamai Technologies getting its momentum back?
*LinkedIn making social work
*Why some big money managers like Ultimate Software
*Assessing Citrix Systems amid the changing networking landscape
*Is Palo Alto Networks worth the price?
*Sourcefire builds its networking security deal pipeline
*Riverbed Technology bounces back on improved execution
*Acme Packet pushes out rebound hopes to 2013
*More new highs for one small-cap cloud-software player
*TSP Deal Report: Eloqua IPO revs up

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IBM will acquire Kenexa (KNXA, $45.75), a provider of cloud-based
solutions for human capital management (HCM), for $46 a share in a
$1.3-billion cash deal. The buyout price is a 42% premium to Friday’s
closing price.

Kenexa has about 8,900 customers, including half of the Fortune 500. For 2012,
Kenexa’s consensus revenue estimate is $363.6 million, representing growth of
25%.
The Kenexa deal follows the recent acquisitions of competitors Taleo (bought by
Oracle) and SuccessFactors (bought by SAP).

Shares of HCM competitors Ultimate Software (ULTI) and Cornerstone
OnDemand (CSOD) are rising today in sympathy.

Turner Investment Partners was the biggest Q2 buyer of Kenexa shares. Turner,
which has 30% of its long equity assets of $12.5 billion in the tech sector, was also a
big buyer of another enterprise software provider, boosting its Tibco Software
(TIBX, $29.55) position by 145% in the June quarter.

Turner picked 2.2 million shares of Tibco, making it the #2 buyer behind
AllianceBernstein, and is now among the 10 largest holders, with 3.76 million
shares.

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