IBM said it would pay $2.7 billion in cash and $400 million in stock for the unit. The deal also includes $400 million in convertible notes.
More than 80 partners at the Irish arm of PricewaterhouseCoopers (PwC) will receive a multimillion euro payout following the sale of its business and technology consulting division to IBM.
PwC, which announced this week it was selling its recently rebranded consulting division, called Monday, will net $3.5 billion (€3.55 billion) in cash and stock following clearance of the deal by regulators.
Sources told The Irish Times yesterday that each PwC partner would be in line for a payout probably worth less than $100,000. The exact size of the cash payment will depend on how the sale proceeds are divided between different territories around the world.
Some 110 staff work at PwC's Irish consulting division and would transfer to IBM Global Services if the deal is approved.
The deal will make IBM Global Services, which employs 800 staff in Dublin and Belfast, one of the biggest global consulting firms. It would also add expertise on business processes and efficiency to IBM Global Services, which specialises in technology consulting.
The sale announcement comes at a time when accounting firms like PwC have been under pressure to separate auditing and consulting businesses because of scandals at Enron, WorldCom and Global Crossing.
PwC had planned to float off its consulting division later this year but dropped this plan due to the collapse in stock markets.
Just two years ago, PwC valued its consulting division at about $18 million but the downturn in the economy and technology spending persuaded the firm to accept IBM's offer of $3.5 billion.
IBM will add 30,000 employees to its service business, which itself employs about 150,000 employees and has grown to become larger than its flagship computer hardware division.
The deal will boost IBM's total workforce above the 300,000 mark. The acquisition, which is the largest takeover announced by IBM, also marks the premature end of PwC's $110 million experiment to rebrand its consulting arm as Monday.
IBM didn't think too long about scrapping Monday, given that its own name ranked third in Business Week's list of the top 100 global brands. Two-month-old Monday didn't make the list.
