IBM Buys Risk Management Analytics Company Algorithmics For $387 million

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Is IBM making up for lost time? After acquiring crime data intelligence software developer i2 yesterday, Big Blue is announcing another purchase this morning. The company is buying Canadian risk management analytics software developer Algorithmics for $387 million.

Algorithmics’ risk analytics software, content and advisory services are used by banks, investment and insurance businesses to help assess risk, address regulatory requirements and make more insightful business decisions. Basically, the software quantifies, manages and optimizes company risk exposure across a range of financial risk domains including market, liquidity, credit, operational and insurance risk as well as economic and regulatory capital risk.

The company has more than 350 clients, including 25 of the top 30 banks and a number of leading insurers, use Algorithmics’ analytics software and advisory services. Clients include The Allianz Group, BlueCrest, HSBC, Nedbank, Nomura, Societe Generale, and Scotia Capital.

IBM says that the acquisition will expand the company’s business analytics offerings for the financial services industry. Algorithmics’ risk analytics software and services will be paired with risk compliance technologies IBM acquired from OpenPages last year to provide clients with a range of business analytics software solutions.

IBM is making a big bet on business analytics, and has spent $14 billion on acquisitions in this area in the past five years. And Big Blue’s Business Analytics and Optimization team has more than 8,000 consultants including 200 mathematicians with more than 500 patents and a network of analytics solution centers.

As we wrote yesterday, this is only one of a handful of acquisitions IBM has made this year. Unlike 2010 (IBM spent $6 billion to acquire 17 companies in 2010), 2011 has been a relatively low-key year for IBM in terms of buying companies. This year’s purchases include real estate software company Tririga. But considering the past two days of purchases, perhaps IBM is set to begin a shopping spree in the second half of 2011.