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Moody's says SoftLayer deal good for IBM

NEW YORK (AP) -- IBM will benefit from buying cloud-computing company SoftLayer, said credit-ratings agency Moody's on Wednesday.

IBM said late Tuesday that it would buy the Dallas-based company, which operates 13 data centers in the U.S., Asia and Europe. The privately held company leases computing horsepower to small- and medium-sized businesses that don't want to build their own data centers. Financial terms weren't disclosed.

Buying SoftLayer Technologies Inc. should help IBM deliver increasingly popular cloud services to its business customers, Moody's said. Cloud services entail software and data stored online, accessible to workers from any Internet-connected device. The Armonk, N.Y., company wants to generate $7 billion annually in cloud revenue by the end of 2015.

Moody's senior vice president Richard Lane estimated the cost of the acquisition at $2 billion, and said IBM could easily pay for the purchase with its $12 billion in cash.

Shares of Armonk, N.Y.-based IBM Corp. fell $2.42 to $203.77 in afternoon trading amid a broader market drop.