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IBM to Acquire Weather Company’s Digital Businesses

Deal reported to be valued at more than $2 billion; Weather Channel to remain separate

IBM announced plans to acquire the Weather Company’s business-to-business, mobile and cloud-based web properties, while the Weather Channel will remain separate.

Financial terms of the deal were not disclosed. The acquisition is valued at more than $2 billion, the Wall Street Journal reported.

The Weather Company, based in Atlanta, is owned by a consortium comprising private-equity firms Blackstone Group and Bain Capital and Comcast’s NBCUniversal, which bought the company in 2008 for $3.5 billion. In August, Weather Company hired Morgan Stanley and PJT Partners to explore a sale of its assets.

Under the terms of the pact, The Weather Channel will license weather forecast data and analytics from IBM under a long-term contract. The companies expect the deal to close in the first quarter of 2016, pending regulatory approvals. Some 900 employees of Weather Company are expected to join IBM.

David Kenny, chairman and CEO of the Weather Company, is set to join IBM after the deal closes. Cameron Clayton, currently Weather Company’s president of product and technology, will head the division after it becomes part of IBM.

For IBM, the Weather Company digital businesses will extend Big Blue’s Watson Internet of Things unit, adding to the company’s commitment to invest $3 billion in the initiative. IBM envisions delivering new kinds of advanced weather analytics to customers in multiple industries, such as retail, airlines and transportation.

“The Weather Company’s extremely high-volume data platform, coupled with IBM’s global cloud and the advanced cognitive computing capabilities of Watson, will be unsurpassed in the Internet of Things, providing our clients significant competitive advantage as they link their business and sensor data with weather and other pertinent information in real time,” John Kelly, senior VP, IBM Solutions Portfolio and Research, said in announcing the proposed deal.

The pact comes after Weather Company and IBM formed a strategic partnership earlier this year, under which Big Blue licensed its cloud-based data platform and collaborated with the Weather Company’s B2B division to deliver joint solutions tailored to specific industries. In addition, Weather Company previously announced plans to host its weather-data services on IBM’s cloud computing platform.

The Weather Company’s meteorological data systems analyze data from 3 billion weather forecast reference points, more than 40 million smartphones and 50,000 airplane flights per day. It sells data products and services to more than 5,000 clients in the media, aviation, energy, insurance and government industries.

Dave Shull, CEO of the Weather Channel Television Network, said that as a standalone business the cabler would continue to invest in partnerships with distributors, advertisers and technology startups.

“The Weather Channel operates as a distinct and separate business with its own leadership team, which enables this to be a smooth and seamless transition,” Shull said in a statement. “We believe a bright future lies ahead for the television business as the most trusted source of weather information.”

For the Weather Company’s consumer-facing mobile and Weather.com properties, which garner 82 million unique monthly visitors, IBM said it plans to develop new data-driven advertising offerings to build additional ad-sponsored consumer and business solutions.

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