IBM, HashiCorp Near Acquisition Deal: Reports

A report on the Terraform creator and cloud infrastructure tools vendor exploring a sale first emerged in March.

IBM is close to a deal to purchase Terraform creator and cloud infrastructure tools vendor HashiCorp, according to multiple media outlets.

Armonk, N.Y.-based cloud and mainframe giant IBM could announce the deal Wednesday, according to Bloomberg. That is the same day it releases results for the first quarter of its 2024 fiscal year.

The Wall Street Journal said the deal could take days to come together, but it also may not result in a sale. Reuters also confirmed that IBM Is near a deal.

HashiCorp For Sale?

Spokespeople for IBM and HashiCorp told CRN that the vendors don’t comment on market rumors or speculation.

A report on San Francisco-based publicly traded HashiCorp exploring a sale previously emerged in March.

The news came amid recent major changes at the vendor, including the departure of its namesake co-founder, Mitchell Hashimoto, and switching Terraform from the open-source license it’s operated under since 2014 to a Business Source License, with the Terraform community starting an open-source version called OpenTofu. OpenTofu became generally available in January.

On March 5, HashiCorp reported a net loss of $48.3 million for its fourth fiscal quarter, using GAAP. The loss was an improvement of about 36 percent year over year.

Some positive measures from the most recent quarterly earnings for the 2024 fiscal year include $583.1 million reported in revenue, an increase of 23 percent year over year. Remaining performance obligation was $775.8 million in the fourth fiscal quarter, up about 20 percent year over year.

HashiCorp has more than 650 systems integrator and reseller partners, according to the vendor. CEO Dave McJannet participated in CRN’s CEO Outlook 2024, saying that the growth of AI is an opportunity for cloud adoption and the work of HashiCorp and its partners.

“Channel partners are an important part of how we do this at HashiCorp, and we look forward to continuing this work in 2024,” he said.

Bloomberg called HashiCorp complementary to IBM subsidiary Red Hat because of HashiCorp’s tools to help migrate workloads from on-premises to the public cloud. IBM has sought a leadership position in not only the hybrid cloud market, but hybrid cloud for artificial intelligence.

HashiCorp has a market capitalization of about $6 billion. Its stock traded at about $30 a share after market close Tuesday, up more than 20 percent from market open.

IBM has a market capitalization of about $167 billion. Its stock traded at about $184 a share after hours Tuesday, up less than 1 percent from market open.

A HashiCorp sale would come amid multiple recent high-price tech acquisitions, with Cisco Systems completing its $28 billion purchase of Splunk and Ahead announcing the purchase of CDI in February.