IBM to Buy Sequent to Bolster Computer Server Offerings

IBM Corp. agreed to buy Sequent Computer Systems Inc. for about $810 million, or $18 a share, in cash to get parts and software for advanced computer servers.

Sequent’s components and software string together many Intel Corp. processors to handle big databases and process online transactions. IBM will sell Sequent servers alongside its own, adding machines that run both Microsoft Corp.’s Windows NT and rival Unix software as IBM competes with Hewlett-Packard Co. and Sun Microsystems Inc.

Armonk, N.Y.-based IBM in the last two years has paid more attention to Windows NT servers as their popularity in corporations has increased. Servers connect computers into a shared network, letting them swap files and other programs and communicate with one another. IBM also sells servers based on its own chips and operating systems.

Sequent’s technology lets customers run applications on Unix and NT operating systems on a single computer system. Servers that can run both Unix and NT may become popular in coming years, analysts said.

Beaverton, Ore.-based Sequent fits into IBM’s strategy to sell computers and software for online and electronic commerce amid the explosive growth of the Internet and related business.

Sequent’s systems can connect as many as 64 Intel chips and run many programs from Oracle Corp., the world’s largest maker of database software.

An IBM spokesman said the company doesn’t plan to fire any of Sequent’s more than 2,500 employees. The Sequent name will remain on Sequent’s products.

The companies hope to complete the acquisition within about 90 days, pending regulatory and shareholder approval, Sequent Chairman and Chief Executive Casey Powell said.

The deal values Sequent at a 29% premium to its closing price June 28, the day before a report said the companies were in acquisition talks. On Monday, Sequent fell 16 cents to close at $17.28 on Nasdaq. IBM closed up 44 cents at $37.81 on the New York Stock Exchange.