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IBM Unloads Rest Of ‘No Longer Core’ Marketing Software Business

Private equity firm Centerbridge Partners will spin off a new company sometime this year that will focus on solutions for marketing and advertising execs, and will continue working with IBM Business partners bringing those products to market.

IBM agreed Thursday to shed the remainder of its marketing automation software business in a deal with a New York City-based private equity firm that will yield a new company focused on marketing and commerce solutions.

Centerbridge Partners will direct funds advised by its affiliates to buy IBM Marketing Platform and other Big Blue commerce products for an undisclosed sum.

Once the deal concludes later this year, Centerbridge will spin off a still-unnamed company focused on technologies that automate the work of marketing and advertising executives, with Mark Simpson, who currently helms the IBM division, serving as CEO.

[Related: IBM CEO Rometty's 5 Lessons For Scaling AI]

In a prepared statement, Centerbridge Senior Managing Director Jared Hendricks said the new entity will "look forward to working" with IBM's current business partners.

In December, Armonk, N.Y.-based Big Blue sold IBM WebSphere Commerce, its flagship e-commerce platform, along with other automated marketing and security solutions under its tent to India-based HCL Technologies for $1.8 billion.

The sales are in line with IBM's strategy of focusing on emerging, high-value segments of the IT market like artificial intelligence, blockchain and cloud.

"The marketing and commerce assets are no longer core to this integrated model and are increasingly sold as stand-alone products," Ed Barbini, vice president of IBM corporate communications, told CRN.

The new company will be well-positioned to advance those stand-alone products in the market, Barbini said.

Simpson, who will lead that venture, founded Maxymiser, a developer of cloud-based marketing software that Oracle acquired in 2015. He worked a year at Oracle before joining IBM as a vice president in the Watson Commerce and Marketing group. Other IBM executives will join Simpson in a New York City office.

The new company will sell marketing automation tools, customer experience analytics, personalized search and an AI-powered content management system. It will continue to invest in developing artificial intelligence capabilities and privacy-protection tools, Centerbridge said.

"IBM plans to work with Centerbridge on cloud and AI to help our customers continue to transform in this new era of technology, and we hope to find additional ways to continue collaborating for the longer term," Inhi Cho Suh, an IBM General Manager, said in a prepared statement.

Last December's deal with India-based HCL included IBM Unica, cloud-based enterprise marketing automation software; IBM WebSphere Commerce, an omni-channel commerce platform for B2C and B2B organizations; and IBM WebSphere Portal, a platform for developing enterprise web portals to help businesses deliver highly personalized social experience to clients.

IBM stock was down slightly in after-hours trading Thursday, trading at $142.56.

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