IBM and DemandTec has announced that the two companies have entered into a definitive merger agreement for IBM to acquire DemandTec in an all cash transaction at a price of $13.20/share, or at a net price of approximately $440 million, after adjusting for cash.

The acquisition of DemandTec will extend IBM’s Smarter Commerce initiative by adding cloud-based price, promotion and other merchandising and marketing analytics to help companies better define the best price points and product mix based on customer buying trends.

Organizations are struggling to meet the demands of rapidly shifting customer buying patterns in the era of mobile and social networks. This new digital marketplace requires companies to be highly responsive to consumer demands on the fly. Whether it’s setting and executing the right pricing strategy or the ability to automatically adjust pricing based on online and offline data, being able to rapidly shift to market changes has become a key competitive advantage for global businesses.