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September 20, 2010 2:36 PM

Cravath, Wilmer on IBM's $1.7 Billion Deal

Posted by Zach Lowe

Another week, another tech deal focused on hardware services and data storage. This time around, the news is about IBM's move to acquire data analytics company Netezza for $1.7 billion in cash, a move intended to increase Big Blue's market share in hardware, data storage, and analytics, according to a company statement and The Associated Press. Netezza specializes in warehousing large piles of data and providing companies with easy ways to search and organize that data.

The not-very-surprising news: IBM turned to longtime counsel at Cravath, Swaine & Moore for work on the deal, according to lawyers on the matter. IBM has been loyal to Cravath since at least the late 1960s, when a Cravath team helped stave off a federal antitrust complaint claiming that the tech giant engaged in anticompetitive practices in the mainframe computer market. The government eventually dropped the case, lending a dose of fame to a young Cravath litigator named David Boies. IBM has also turned to Cravath amid a current antitrust probe centering on IBM's marketing of hardware and software products, according to our prior reporting

Partners Scott Barshay and George Schoen led the firm's team on the deal. They did not immediately respond to requests seeking comment. 

Netezza, which is based in Massachusetts, retained Wilmer Cutler Pickering Hale and Dorr for counsel on the deal. Partners Hal Leibowitz and David Westenberg led the firm's team on the deal. They did not immediately respond to requests for comment.

The $1.7 billion price amounts to $27 for each Netezza share, a 10 percent premium on Friday's closing price. The merger agreement calls for Netezza to pay IBM a $56 million breakup fee if the deal falls apart under certain circumstances. 

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