IBM to buy Octo for enhanced US federal government digital transformation

IBM will acquire Octo, an IT modernization and digital transformation services provider, from Arlington Capital Partners to accelerate the US federal government digital transformation.

The proposed acquisition marks IBM’s eighth acquisition of 2022 and comes on the heels of IBM Consulting’s acquisition of Dialexa, Neudesic, and Taos.

Octo serves the US federal government and its agencies such as civilian, health, and defense.

Based in Reston, Virginia, Octo will complement IBM’s current IT modernization and digital transformation expertise as well as bring extensive federal mission understanding.

In addition, the acquisition will bring oLabs, Octo’s 14,000 square foot innovation facility, improving IBM’s capabilities to work together with federal agencies.

IBM to acquire Octo for enhanced US federal government digital transformation. Photo courtesy of Pbech/Wikimedia Commons.

John Granger — IBM Consulting Senior Vice President, said: “Governments require agility and resiliency to meet the evolving needs of citizens directly and in real time.

“The combination of Octo’s highly qualified and respected team with IBM’s consulting expertise, technical capabilities and strategic partner ecosystem will enable federal clients to transform faster and better serve citizens.”

Post-closing, IBM will integrate around 1,500 employees of Octo with IBM Consulting’s US public and federal market organization.

The financial terms of the deal were not divulged.

Mehul Sanghani — Octo CEO said: “Octo was founded on the belief that digital transformation could be delivered at scale to modernize the federal government’s approach to today’s most pressing challenges – from public healthcare to national security, to defense and intelligence.

“Today, we are excited to join forces with IBM to continue to deliver these digital transformation capabilities with greater reach and scale.”

The transaction is expected to close in the fourth quarter of this year, subject to regulatory approvals and customary closing conditions.

Since April 2020, IBM has acquired over 25 companies to strengthen the company’s hybrid cloud and artificial intelligence capabilities.