More companies have been streamlining, either
by divesting or spinning off assets seen as
noncore, as they pursue more targeted
business strategies.
Get ready for anything that's "noncore" to be jettisoned however IBM can do it: divestiture, outright cutting, etc.
https://www.wsj.com/articles/ibm-explores-sale-of-weather-business-c174f75c
By: Laura Cooper and Lauren Thomas
April 12, 2023 5:30 pm ET
International Business Machines Corp. IBM -1.44%decrease; red down pointing triangle
is exploring a sale of its weather operation, according to people familiar with the matter, as the technology company seeks to streamline its operations. An auction of the business is at an early stage, the people said, and there may not be a deal. Should there be one, private-equity is most likely the buyer in a deal that could be valued at more than $1 billion, the people said.
IBM agreed to buy the business in 2015, purchasing The Weather Company’s business-to-business, mobile and cloud-based businesses including Weather.com, which provides weather forecasts around the globe. The deal price at the time was pegged at more than $2 billion.
The Weather Channel wasn’t part of the deal, but agreed to license weather-forecast data and analytics from IBM.
The deal was part of a push by IBM to use its cloud infrastructure to provide accurate weather forecasts and help companies control costs. The business issues more than 25 billion forecasts a day, according to the company’s website.
A sale of the weather unit would be a part of a broader push by IBM to streamline its operations as the once-dominant company’s shares languish near levels they traded at more than 20 years ago.
IBM is in the middle of a yearslong makeover, focusing on transforming itself into a hybrid-cloud and artificial-intelligence business. In recent years, it has spun off or divested businesses including Kyndryl Holdings Inc., a big player in IT infrastructure and data-center management.
The company, which has a market valuation of just under $120 billion, in 2022 closed the sale of healthcare-data and analytics assets that were a part of its IBM Watson Health operation, to private-equity firm Francisco Partners. When the company announced the deal earlier that year, IBM said that the divestiture was a step toward focusing more on its platform-based hybrid cloud and artificial-intelligence strategy.
In January, IBM said that it had joined other tech companies in shedding jobs, roughly 3,900 in the case of Big Blue.
The company in January posted flat sales for the fourth quarter after a strong U.S. dollar took a toll amounting to more than $1 billion.
The company forecast that exchange rates would move in its favor this year. It also has forecast mid-single-digit adjusted revenue growth and about $10.5 billion in consolidated free cash flow for the full year.
More companies have been streamlining, either by divesting or spinning off assets seen as noncore, as they pursue more targeted business strategies. The Wall Street Journal reported this week that air-conditioning company Carrier Global Corp. is working on a plan to sell or spin off its Fire & Security business segment, which accounts for about 17% of its sales.