(Bloomberg) -- International Business Machines Corp. said it has agreed to buy HashiCorp Inc. in a transaction valuing the software company at $6.4 billion on an enterprise basis.

IBM is paying $35 a share for San Francisco-based HashiCorp, according to a statement Wednesday confirming an earlier report by Bloomberg News.

The announcement coincided with IBM reporting its first-quarter results, including a 1% gain in its revenue to $14.5 billion over the same period last year. Its free cash flow was $1.9 billion, up about $600 million from a year prior.

Shares of HashiCorp jumped as much as 11% on Wednesday, extending gains from Tuesday when reports emerged that IBM was in advanced talks to acquire the company. HashiCorp closed up 7.8% to $31.41 in New York, giving the company a market value of $6.27 billion.

“HashiCorp has a proven track record of enabling clients to manage the complexity of today’s infrastructure and application sprawl,”IBM Chairman and Chief Executive Officer Arvind Krishna said in the statement. “Combining IBM’s portfolio and expertise with HashiCorp’s capabilities and talent will create a comprehensive hybrid cloud platform designed for the AI era.”

HashiCorp’s software helps companies in a range of industries set up their digital infrastructure in the cloud, which can lower costs and speed up the time it takes them to bring products to market. A deal for HashiCorp would strengthen IBM’s hybrid cloud focus and “appears to be a good strategic fit,” Bloomberg Intelligence senior analyst Anurag Rana wrote on Tuesday.

IBM’s largest acquisition to date remains its $34 billion acquisition of Red Hat in 2019. That software business has become a point of investor anxiety in recent quarters, as its growth has slowed to single digits, comparatively sluggish for a unit that once regularly jumped more than 20% each quarter.

(Updates with statement in second paragraph.)

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