By Arsheeya Bajwa

(Reuters) -International Business Machines is nearing a deal to buy cloud software provider HashiCorp, according to a person familiar with the matter.

Hashicorp’s stock surged 24%, giving it a market value of $6.1 billion, after the Wall Street Journal first reported the talks.

Under CEO Arvind Krishna, IBM has focused on acquisitions to build out its cloud offerings. The boom in generative artificial intelligence has increased the attractiveness of cloud software as it helps process vast amounts of data.

California-based HashiCorp allows customers to establish and manage their infrastructures on the cloud. The company’s annual revenue jumped 22.5% to $583.1 million for the year ended Jan. 31, beating analysts’ average estimate at the time, according to LSEG data.

A deal for HashiCorp could be finalised in the coming days, but it is still possible that the talks may not result in a transaction, according to the WSJ report.

HashiCorp declined to comment when contacted by Reuters.

IBM completed nine acquisitions in 2023, including a deal for technology spend-management platform Apptio from Vista Equity Partners for $4.6 billion.

The company’s 2018 acquisition of software company Red Hat for $34 billion, including debt, remains its biggest buyout till date.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shailesh Kuber and Sriraj Kalluvila)