IBM closes in on $2bn Weather Channel deal
IBM is close to agreeing terms to takeover Weather Company, owner of the Weather Channel.
The acquisition is expected to be announced later today and will see the multinational tech giant acquiring the digital and data assets of the Weather Company in a deal valued at more than $2bn.
It does not include the traditional TV channel business but does include such digital businesses as the website and app, intellectual property, infrastructure and data.
IBM is understood to be interested in Weather Co.’s forecasting group, WSI which supplies the technology and weather data that the Weather Co. licences to an array of companies across a wide range of industries from airlines to insurance providers.
The company is currently owned by a consortium of private-equity firms who bought the company in 2008 for around $3.5bn. Those involved in the consortium include Bain Capital LLC and Blackstone Group LP, and Comcast Corp.’s NBCUniversal.
According to the WSJ Weather Co. chief executive, David Kenny, is expected to join IBM after the deal closes.
Weather Channel chief executive, Dave Shull, said “The Weather Channel will continue to be owned and supported by our existing shareholders- Bain Capital, Blackstone and NBCUniversal- and operate as a standalone business.”
Shull added that “we believe a bright future lies ahead for the television business as the most trusted source of weather information."
IBM hopes to enhance the Weather Channel’s forecasts to build new products which it could sell to businesses such as using weather data to help firms manage their supply chain in anticipation of bad weather which would affect sales.