IBM has entered into an agreement to acquire The Weather Company’s B2B, mobile and cloud-based web properties, including WSI, weather.com, Weather Underground and The Weather Company brand for a reported $2 billion.
The Weather Channel, which is the cable/television segment of The Weather Company (TWC), is not part of this transaction but will license weather forecast data and analytics from IBM under a long-term contract. TWC is owned by Blackstone, Bain Capital and NBCUniversal which acquired the company for $3.5 billion in 2008.
The acquisition is the result of an alliance formed by TWC and IBM earlier this year that provided for IBM to license TWC’s cloud data platform and to provide businesses and developers with real-time weather information.
This acquisition will combine IBM’s cognitive and analytics platform and TWC’s cloud data platform, which powers the fourth most-used mobile app daily in the United States and handles 26 billion inquiries to its cloud-based services each day. TWC’s information models analyze data from three billion weather forecast reference points, more than 40 million smart-phones and 50,000 airplane flights per day, allowing it to offer a huge range of data-driven products and services to more than 5000 clients in the media, aviation, energy, insurance and government industries. TWC is headquartered in Atlanta (www.theweathercompany.com).
For IBM, this transaction will extend the reach of its cloud data services capabilities and expand the business capabilities and consumer reach of the acquired TWC assets. Using TWC’s cloud-based data platform, IBM will be able to collect larger and more varied and higher volume data sets, store them, analyze them and in turn distribute them across its Watson platform.
“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,” said John Kelly, senior vice president, IBM Solutions Portfolio and Research. “This cloud platform will position IBM to arm entire industries with deep multimodal insights that will help enterprises gain clarity and take action from the oceans of data being generated around them.”
Blackstone is one of the world’s largest investment and advisory firms. The firm’s alternative asset management businesses include the management of private equity funds, real estate funds, hedge fund solutions, credit-focused funds and closed-end funds. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Blackstone is headquartered in New York (www.blackstone.com).
Bain Capital manages several pools of capital, including private equity, venture capital, and public equity and leveraged debt assets. The firm has more than $75 billion in assets under management. Since its inception in 1984, Bain Capital has made private equity investments and add-on acquisitions in more than 450 companies in a variety of industries around the world. The firm has offices in Boston, New York, Chicago, Palo Alto, London, Munich, Dublin, Luxembourg, Tokyo, Shanghai, Hong Kong, Mumbai and Melbourne (www.baincapital.com).
Ropes & Gray (www.ropesgray.com) represented Bain Capital and The Blackstone Group on this transaction. The Ropes & Gray team included private equity partners Newcomb Stillwell, William Mone, and Neill Jakobe.
© 2015 PEPD • Private Equity’s Leading News Magazine • 10-29-15
