International Business Machines Corporation (NYSE:IBM) entered into a definitive agreement to acquire HashiCorp, Inc. (NasdaqGS:HCP) for approximately $7.5 billion on April 24, 2024. Under the terms of the agreement, IBM will acquire HashiCorp for $35 per share in cash, representing an enterprise value of $6.4 billion, net of cash. HashiCorp will be acquired with available cash on hand. Following the acquisition, HashiCorp will continue to build products and services as HashiCorp and will operate as a division inside IBM Software. Upon termination of the Merger Agreement in certain circumstances, HashiCorp will be required to pay IBM a termination fee of $264.2 million.

The acquisition is subject to approval by HashiCorp shareholders, regulatory approvals, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions. The boards of directors of IBM and HashiCorp have both approved the transaction. The board of directors of the HashiCorp has unanimously approved the transaction. The Company's largest shareholders and investors, who collectively hold approximately 43% of the voting power of HashiCorp's outstanding common stock, entered into a voting agreement with IBM pursuant to which each has agreed to vote all of their common shares in favor of the transaction and against any alternative transactions. The transaction is expected to close by the end of 2024. It is anticipated that the transaction will be accretive to Adjusted EBITDA within the first full year, post close, and free cash flow in year two.

Tony Jeffries, Michael Coke, Amanda Urquiza, Martin Korman, Douglas Schnell, Michael Coke, Amanda Urquiza, Remi Korenblit, Kenji Strait, Maureen Ohlhausen, Taylor Owings, Robin Crauthers, Scott McCall, Josephine Aiello LeBeau, Seth Cowell, Anne Seymour, Joshua Gruenspecht, Matthew Staples, John McGaraghan, Matthew Gorman, Susan Reinstra, Martin Sul, and Myra Sutanto Shen of Wilson Sonsini Goodrich & Rosati acted as legal advisors to HashiCorp on the transaction. Steven J. Williams, Scott A. Barshay and Dotun Obadina of Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to IBM. JPMorgan Chase & Co. (NYSE:JPM) and Barclays acted as financial advisors to IBM. Qatalyst Partners LP acted as financial advisor and fairness opinion provider to HashiCorp. Spencer Klein of Morrison & Foerster LLP represented Qatalyst Partners as financial advisor to HashiCorp.