Confluent, Inc.

Confluent, Inc. Joins IBM in $10.2 Billion All-Cash Acquisition, Delists from Nasdaq

Event Description Confluent, Inc., a leader in real-time data streaming, has officially been acquired by International Business Machines Corporation (IBM). This significant all-cash transaction, valued at approximately $10.2 billion, concludes Confluent's journey as an independent public company and integrates its cutting-edge technology into IBM's extensive portfolio.

• Acquirer: International Business Machines Corporation (IBM)
• Target: Confluent, Inc. (formerly NASDAQ: CFLT)
• Transaction Value: Approximately $10.2 billion
• Consideration: Shareholders received $31.00 in cash for each outstanding share of Confluent Class A and Class B common stock.

Event Date/Timeline Confluent and IBM signed the definitive merger agreement on December 7, 2025. The acquisition officially closed on March 17, 2026. The $31.00 per-share consideration represented a premium of approximately 25% over Confluent's closing share price on December 6, 2025, the day before the merger agreement announcement.

Impact Assessment The acquisition brings significant changes for various stakeholders:

• Former Confluent Shareholders: IBM converted all outstanding Confluent Class A and Class B common stock into the right to receive $31.00 per share in cash. Confluent stock (CFLT) has been delisted from the Nasdaq Global Select Market and is no longer publicly traded.
• Confluent Employees: Confluent now operates as a wholly-owned subsidiary of IBM, and its employees have joined the IBM organization. Confluent's former directors and executive officers, including CEO Edward Jay Kreps, have stepped down, with IBM's subsidiary leadership assuming control. Employee stock options and restricted stock units (RSUs) were generally cashed out at the acquisition price or converted into IBM RSUs, aligning incentives with IBM's future performance. Notably, Chief Revenue Officer Ryan Mac Ban resigned before the deal's closure.
• Customers: Confluent's customers will now engage with IBM for their real-time data streaming needs. This transition is expected to provide enhanced integration with IBM's broader product ecosystem, potentially leading to more robust solutions and expanded support resources.
• Holders of Convertible Notes: Holders of Confluent's 0% Convertible Senior Notes due 2027 now have specific rights triggered by this "fundamental change." They can elect to convert their notes into cash based on the $31.00 per share acquisition price, or they can require Confluent (now IBM) to repurchase their notes. The repurchase price equals 100% of the principal amount plus accrued and unpaid interest up to, but excluding, the repurchase date. The company will provide specific instructions and deadlines for these elections.

Financial Impact The acquisition was an all-cash transaction valued at approximately $10.2 billion. IBM paid $31.00 in cash for each outstanding share of Confluent Class A and Class B common stock, representing a premium of approximately 25% over Confluent's closing share price on December 6, 2025. IBM financed the acquisition using a combination of cash on hand and/or existing debt facilities. Confluent incurred certain undisclosed transaction-related expenses related to the merger.

While Confluent's 8-K did not detail the immediate financial impact on IBM, such a significant acquisition typically involves a mix of cash and debt. IBM will integrate Confluent's revenue streams and operational costs into its financial reporting. Analysts will closely monitor IBM's future earnings reports for insights into the acquisition's effect on earnings per share and its contribution to IBM's overall revenue growth, particularly within its software and consulting segments.

Strategic Rationale and Synergies IBM's acquisition of Confluent represents a strategic move to significantly enhance its capabilities in real-time data processing, cloud, and artificial intelligence. Confluent's platform, often described as the "nervous system for data," empowers businesses to handle vast streams of data instantly – a critical component for modern digital transformation. By integrating Confluent's technology, IBM aims to offer a more comprehensive and competitive suite of data services, drive innovation, and expand its market reach, especially in hybrid cloud environments.

For Confluent's Board of Directors, the acquisition delivered immediate and certain cash value to its shareholders, representing a compelling return on their investment. The board determined that joining forces with a global technology leader like IBM would accelerate the adoption of Confluent's platform and provide greater resources for product development and customer support, benefiting both the technology and its users. The combined entity expects to realize synergies through cross-selling opportunities and expanded market access.

Forward Outlook and Risks Integrating Confluent's technology and teams into IBM is a complex process that will unfold over the coming months and years. IBM's key focus areas will include retaining Confluent's talent, ensuring seamless customer transitions, and maximizing technological synergies. Potential risks include challenges in integrating diverse corporate cultures, retaining key customers, and navigating the competitive landscape in the rapidly evolving data streaming market. IBM has expressed its commitment to fostering Confluent's innovation and leveraging its platform to drive future growth within its portfolio.

Key Takeaways for Investors:

• Confluent (CFLT) stock is no longer traded. If you held shares, you should have received $31.00 per share in cash.
• The investment focus shifts to IBM (NYSE: IBM). For those interested in the future of Confluent's technology and its market impact, monitoring IBM's performance and strategic announcements will be key.
• Convertible Note Holders: Review the specific terms and deadlines for converting or repurchasing your notes, as outlined in the bond indenture and subsequent company communications.
• This acquisition marks a definitive event, concluding Confluent's chapter as an independent public company and signifying a major consolidation in the enterprise data streaming sector.