International Business Machines Corp (NYSE:IBM) is reportedly in the final stages of negotiations to acquire cloud software provider HashiCorp, sources familiar with the matter revealed to the Wall Street Journal on Tuesday afternoon.
San Francisco-based HashiCorp's solutions are widely used by businesses to streamline their cloud operations and improve security.
The potential deal, which could be finalized as early as Wednesday, drove HashiCorp's stock up by 24%, valuing the company at $6.1 billion.
IBM’s CEO Arvind Krishna has been actively pursuing acquisitions to bolster its cloud offerings, particularly amid the growing demand for generative artificial intelligence, and HashiCorp aligns with its strategy to strengthen its hybrid cloud focus, according to analysts.
HashiCorp saw its annual revenue increase by 22.5% to $583.1 million, outperforming analysts' expectations.
Neither company has commented on the reported negotiations.
If successful, the acquisition could mark another significant investment by IBM in expanding its cloud portfolio, following its $34 billion acquisition of Red Hat (NYSE:RHT) in 2018.