IBM (NYSE: IBM) announced on Tuesday that it has signed a definitive agreement to sell its weather business, The Weather Company, to Francisco Partners, a leading global investment firm that specializes in partnering with technology businesses. The deal is expected to close in the fourth quarter of 2023, subject to customary closing conditions and regulatory approvals. The terms of the transaction were not disclosed.
The Weather Company provides highly accurate weather data to consumers and businesses through its digital properties, such as The Weather Channel mobile app and website, Weather Underground and Storm Radar, as well as its enterprise offerings for broadcast, media, aviation, advertising technology and data solutions for other emerging industries. The Weather Company also has a forecasting science and technology platform that leverages IBM’s artificial intelligence and cloud capabilities.
IBM acquired The Weather Company in 2015 as part of its strategy to expand into the Internet of Things market. However, IBM has since shifted its focus to cloud computing and sold its legacy infrastructure unit Kyndryl Inc. last year. In January, IBM said it would cut about 3,900 workers, with many of the reductions focused on employees who remained after units had been divested.
IBM will retain its sustainability software business, including its Environmental Intelligence Suite (EIS), which helps clients curate, measure, report and operationalize environmental, social and governance (ESG) data to inform decision making, improve performance and meet regulatory requirements. IBM intends to continue leveraging The Weather Company’s weather data for EIS, which spans various climate-related use cases. EIS also uses a geospatial foundational AI model powered by NASA’s satellite dataset and offered as part of watsonx, IBM’s AI and data platform.
Francisco Partners to invest in The Weather Company’s growth potential
Francisco Partners is a technology-focused private equity firm that has invested in more than 300 companies since its inception in 1999. Francisco Partners has a track record of acquiring and growing technology businesses across various sectors, such as software, internet, healthcare IT, security and communications.
Francisco Partners said that it plans to operate The Weather Company as a standalone company and provide it with increased investment and resources to unlock new growth opportunities. Francisco Partners said that it aims to help The Weather Company move beyond forecasting alone and bring new tools and experiences to users to help them understand how weather impacts all aspects of their lives, starting with health and well-being. For businesses, Francisco Partners said that it intends to offer more actionable insights so organizations can provide greater value to their customers. With its advertising platform, Francisco Partners said that it will continue to provide quality real-time experiences for the ad and subscription media industry, while complying with all consumer privacy laws and regulations.
“We’re proud of what The Weather Company team has accomplished with IBM, and we are confident that the best path forward is as a standalone company benefiting from Francisco Partners’ expanded investment, dedication and expertise,” said Cameron Clayton, General Manager of The Weather Company. “We look forward to working with Francisco Partners to continue delivering the most accurate weather forecasts and insights to our millions of users and thousands of enterprise customers around the world.”
“We are thrilled to partner with The Weather Company, which is a clear leader in weather data and forecasting science and technology,” said Dipanjan Deb, Co-Founder and CEO of Francisco Partners. “We see tremendous potential for The Weather Company to leverage its unique assets and capabilities to create new value for consumers and businesses across various industries. We are excited to support The Weather Company’s talented team as they pursue their vision of becoming the most trusted source of weather information and insights for everyone.”
The Weather Company is the world’s most accurate forecaster
The Weather Company is among the top 10 most trusted brands in America1 and serves an average of more than 415 million people each month through its consumer-facing digital properties2. The Weather Company also serves more than 2,000 businesses across a variety of industries through its enterprise offerings2.
The Weather Company is recognized as the world’s most accurate forecaster by several independent studies. According to a study by ForecastWatch.com3, a leading provider of accuracy measurement services for the weather industry, The Weather Company was the most accurate provider of one- to three-day temperature forecasts in 2020. The study also found that The Weather Company was the most accurate provider of one- to three-day precipitation forecasts in 2020.
The Weather Company’s accuracy is driven by its forecasting science and technology platform, which runs on an IBM POWER9 supercomputer4. This platform updates hourly and at a 3 – 4 km resolution to create a clear and reliable weather picture for more reliable weather insights and analytics4. The platform also incorporates data from various sources, such as satellites, radars, weather stations, airplanes, cars, smartphones and IoT devices4.
The Weather Company’s accuracy is not only beneficial for consumers who want to plan their daily activities, but also for businesses that rely on weather information to optimize their operations, reduce costs, enhance safety and improve customer satisfaction. For example, The Weather Company helps airlines reduce fuel consumption and emissions, broadcasters deliver engaging and personalized content, retailers adjust inventory and pricing, farmers increase crop yields and insurers assess risks and claims.