IBM and Kenexa Corporation today announced they have entered into a definitive agreement for IBM to acquire Kenexa, a publicly held company headquartered in Wayne, Pa., in a cash transaction at a price of $46 per share, or at a net price of approximately $1.3 billion.

The acquisition bolsters IBM's leadership in helping clients embrace social business capabilities while gaining actionable insights from the enormous streams of information generated from social networks every day.

Kenexa, a leading provider of recruiting and talent management solutions, brings a unique combination of Cloud-based technology and consulting services that integrates both people and processes, providing solutions to engage a smarter, more effective workforce across their most critical business functions.

Kenexa complements IBM's strategy of bringing relevant data and expertise into the hands of business leaders within every functional department, from sales and marketing to product development and human resources. As a result of this synergy, clients will be able to attract and develop the right skills to build the right teams, for the right projects, the first time.

The adoption of social business technology is supporting the growth of big data and the need for analytics in the enterprise. A recent global IBM study revealed that 57 percent of CEOs identified social business as a top priority and more than 73 percent are making significant investments to draw insights into available data.

The survey also reveals that 70 percent cite human capital as the single biggest contributor to sustained economic value. The combined strengths of IBM and Kenexa are key differentiators at a time when organizations of all sizes are looking to increase workforce efficiencies and gain more insight from their business information.

Social media has pervaded the lives of consumers, helping them connect with each other in new ways. However, a shift is occurring in the enterprise as business leaders look for ways to generate real value through the use of social technologies to evolve their front-line business operations. According to Forrester Research, the market opportunity for social enterprise apps is expected to grow at a rate of 61 percent through 2016.*

"Every company, across every business operation, is looking to tap into the power of social networking to transform the way they work, collaborate and out innovate their competitors," said Alistair Rennie, general manager, social business, IBM. "IBM is uniquely positioned to help clients generate real returns from their social business investments, while helping them gain intelligence into the data being generated in these networks to be more competitive in their markets."

"The customer is the big winner in all this because the combination of our two organizations will deliver more business outcomes than ever before," said Rudy Karsan, chief executive officer, Kenexa. "Together, Kenexa and IBM will be unmatched in the industry, offering solutions that extend from strategy to the technology platform to the delivery of services for clients."

Today, Kenexa supports more than 8,900 customers across a variety of industries, including financial services, pharmaceuticals, retail and consumer, including more than half of the Fortune 500.

With Kenexa's world-class front-office process solutions, IBM will be able to offer strategic consulting, a social technology platform, and expertise on a global scale to help clients enable a smarter workforce and gain a competitive advantage in any market. By creating a smarter workforce, employees can resolve problems before they arise to improve customer service, drive innovation to bring products and services to market faster, and increase sales by building new skills -- linking the right experts to the right clients.

The Kenexa acquisition will complement IBM's social business and HR business services leadership. More than 60 percent of Fortune 100 companies have licensed IBM's solutions for social business. Through its combination of social software, analytics, content management, and deep industry expertise, IBM is uniquely positioned to help organizations capture information, create insights and generate interactions that translate into real business value.

With operations in 21 countries worldwide, Kenexa has approximately 2,800 employees. Consistent with its strategy, IBM plans to continue to support Kenexa clients and enhance Kenexa technologies while allowing these organizations to take advantage of the broader IBM portfolio.

IBM expects the transaction to close in the fourth quarter of 2012, subject to Kenexa shareholder and regulatory approvals and the satisfaction of other customary closing conditions.