IBM to pay $745 million for software provider

STOCKHOLM, Sweden – International Business Machines Corp. said Monday it agreed to buy software provider Telelogic AB for $745 million in cash, bolstering IBM’s portfolio for the defense, telecommunications and automotive industries.

IBM said Telelogic will fit into its Rational software division, which also was boosted with IBM’s purchase last week of Watchfire Corp., a maker of security software. Overall, IBM plans to maintain an aggressive acquisition strategy as part of a drive to have software contribute half of the company’s profit by 2010.

Telelogic is IBM’s 43rd software acquisition since 2001.

Telelogic products help companies develop and test software used in complex systems such as aircraft radar or antilock braking systems. Telelogic’s revenue grew 20 percent to about $200 million last year.

Telelogic shares rose 0.9 percent to 21.70 kronor ($3.10) in Stockholm. IBM shares rose 15 cents to $103.22.

Telelogic, based in Malmo, Sweden, has U.S. headquarters in Irvine, Calif., and has more than 900 employees in 20 countries.

The deal requires approval from authorities.

•Warner Music Group Corp. said Monday it is considering making another offer to purchase the British record label company EMI Group PLC.

In March, Warner Music offered to purchase EMI for $4.2 billion, but the bid was rejected.

In May, EMI agreed to be purchased by private equity firm Terra Firma for $4.7 billion.

Warner Music said if it makes another offer, it will be preconditional to obtaining the necessary antitrust clearances.

Warner Music shares fell 18 cents, or 1.1 percent, to $16.53 Monday.

•Richard Notebaert, who pulled a troubled Qwest Communications from the brink of bankruptcy amid a multibillion-dollar accounting scandal, announced plans Monday to retire as chairman and chief executive officer. Qwest shares fell 8 percent Monday.

Notebaert, 59, said he will leave the Denver-based telecommunications company after the board of directors selects a replacement. He is the third top-ranking executive to announce plans to leave Qwest this year.

Notebaert was tapped to head Qwest Communications International Inc., the main telephone service provider in 14 mostly Western states, after ex-CEO Joe Nacchio resigned in June 2002 amid the scandal that forced the company to restate at least $2.2 billion in revenue.