Francisco Partners, a leading technology investment firm, is reportedly acquiring The Weather Company, a subsidiary of IBM.
IBM declared this news on 22 August. However, specific terms of the transaction remain undisclosed.
Under the agreement, IBM will transfer The Weather Company’s consumer-focused assets, such as Storm Radar and Weather.com, to Francisco Partners. It will also give up its forecasting science and technology platform and enterprise offerings—media, broadcast, aviation, and advertising technology—as part of the transaction.
However, IBM has confirmed that it will retain the ownership of its sustainability software services and its Environmental Intelligence Suite (EIS). EIS is an AI-enabled SaaS-based climate and sustainability system. It integrates proprietary and third-party IoT, weather, and geospatial data to help users get actionable business insights.
IBM expects to keep using The Weather Company’s weather data within its EIS framework to support various climate-related applications.
This strategic move has been marked as a notable development in the tech industry, with Francisco Partners augmenting its portfolio and improving its capabilities in the data analytics and weather forecasting sectors.
The Weather Company, supported by a top private equity firm, plans to innovate and expand as an independent business.
Francisco Partners is optimistic about the future of its recently acquired business and plans to invest more resources into the company. The tech investment firm is committed to helping The Weather Company expand “beyond forecasting”. It will also develop “new tools and experiences” focused on well-being and health.
The Weather Company’s advertising platform is to continue providing the subscription and advertisement media with proactive and real-time experiences, whilst adhering to consumer privacy regulations.
“Amid the growing volatility of weather, The Weather Company’s unique set of consumer, media, and industry-specific products provide mission-critical, data-driven weather insights to individuals and businesses around the world,” stated Alan Ni, Partner at Francisco Partners. “We are excited to partner with the management team to grow The Weather Company’s robust portfolio of technology offerings and deliver a great product experience for its customers.”
“We’re proud of what The Weather Company team has accomplished with IBM, and we are confident that the best path forward is as a standalone company benefiting from Francisco Partners’ expanded investment, dedication, and expertise. We’re excited to see the next phase of The Weather Company’s journey,” said Rob Thomas, Senior Vice President, Software and Chief Commercial Officer at IBM. “Over the last few years, we’ve evolved IBM to be a hybrid cloud and AI company. We regularly review our portfolio to make sure our business areas are core to that strategy, and today’s news reflects our continued focus on these two transformational technologies.”
In April 2023, IBM disclosed its plan to divest its holding in The Weather Company, acquired back in 2016. The divestiture is part of the company’s effort to strengthen its core offering in AI and hybrid cloud software.
However, IBM has refused to offer in-depth insight into the transaction. Likewise, FP declined to comment on the acquisition of The Weather Company immediately.
The deal, estimated to be valued at about $1 billion, is expected to be finalised in the first quarter of 2024, pending regulatory approvals.
Corporate carve-outs and selling-off businesses are common among dynamic businesses looking to maximise their portfolio. However, executing these complex cross-functional transactions is highly challenging and requires a coordinated process to be navigated successfully. Private equity firms and enterprise clients looking for smooth M&A transactions should leverage consultancy services such as Fission Consulting. With their expertise, these services help mitigate investment risks and make more informed decisions.
Sohela is an electrical engineer and a self-professed writer with a keen interest in all things tech. When she’s not writing killer content pieces, you’ll find her enjoying tempting foods in her favourite restaurants.