Why Could IBM Be Interested in Revel Systems?



IBM may acquire Revel Systems to enhance its presence in the retail solutions space

Earlier in the series, we discussed the possible sale of Rackspace (RAX). We also discussed Salesforce’s (CRM) recent acquisition of Quip and how it would boost Salesforce’s offerings in the cloud space. IBM (IBM) is another company in the technology space that’s trying to be a part of the cloud growth story primarily through acquisitions. IBM’s latest target appears to be Revel Systems in order to expand its position in the retail and mobile payments sector. According to Bloomberg, IBM is in the initial stage of considering this acquisition.

Revel Systems is an Apple (AAPL) iPad-based POS (point-of-sale) company. Revel’s paid subscription services software offers payroll, inventory, and accounting functions to restaurants and retailers.
Revel systems

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Revel Systems’ profile

The above presentation shows the integration of Revel Systems PoS and e-commerce businesses. Revel is a part of the payments ecosystem, which is comprised of processors and card networks. Revel Systems, if acquired, would be a part of IBM’s Retail Solutions segment.

Revel Systems was founded in 2010. CrunchBase data show that Revel Systems has raised $127.5 million in funding to date. Intuit (INTU), Anderson & Stowe, Roth Capital Partners, and Welsh Carson are some notable investors in Revel Systems.

Investors who want to gain exposure to IBM can consider investing in the SPDR S&P 500 ETF (SPY). SPY invests ~0.71% of its holdings in IBM. It also has ~8% exposure to application software.


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