Interest in ILOG

The “Official Response Document” that ILOG prepared (and posted on their Investor Relations site) responding to IBM’s offer is fascinating reading.  I particularly liked the “Historical Background” (pages 5-10) that begins with IBM’s orginal contacts with ILOG.  From an initial discussion of IBM’s licensing ILOG’s rules software in late 2006, ILOG seemed to quickly come “in play”.  New companies (called Company B, Company C, right up to Company F) began discussions with ILOG on purchasing all or part of it.   Clearly there was a lot of interest in ILOG! By late September, 2007, IBM stopped considering ILOG, only to reopen discussion in April 2008, resulting in a memorandum of understanding by the end of July.

Annex 1 (beginning on page 40 or so of the pdf document) was also interesting since it provides comparable firms (FairIsaac, SPSS and so on) as part of the financial analysis.

Reading through the document and the history, I was struck by how much “rules” was the initial driver of the acquisition, but also by how optimization was seen as a key aspect of the deal.  I don’t know who Companies B, C, D, E, or F were, but I think I am happy that IBM ended up as the partner in this deal.

Of course, all this is just personal opinion.  I don’t own any stock (any more:  I bought at the top and sold at the bottom, which is my general financial strategy) and, as my colleagues in finance remind me, am unqualified to truly evaluate the finances.  But I do recommend reading the document!