IBM splashes $745m for dev tools maker

IBM is to spend $745m to buy software-development tools company Telelogic.

Sweden-based Telelogic, which has about 1,100 employees worldwide, makes software for developing complex applications.

IBM offered $3 per share to purchase the public company, which had revenue of about $208m last year. Big Blue's offer is a 21 per cent premium over the closing price on 31 May, which, according to Telelogic, was the last day before market speculation started over a possible acquisition.

Telelogic's application lifecycle management products are used to design, write and test software. Its software tools can be used in the creation of sophisticated products such as automobile braking systems or airplane radar, IBM said.

Telelogic's board of directors has offered its support for the deal, which must still be approved by shareholders.

The Telelogic software will become part of IBM's Rational division, which already sells application lifecycle management products. Acquisitions have become a vital part of Big Blue's revenue growth strategy.

Martin LaMonica writes for CNET News.com