After spending close to five billion dollars for 13 acquisitions in 2006, IBM plans to keep up its "accelerated" pace of acquisitions this year and has earmarked Indian IT space as a key target region.

The US-based IT giant is believed to have sounded its investment bankers to scout for potential targets in the country, which could include mostly small-to-mid sized software firms, although it is not averse to acquiring large companies at the right price.

While the company is tight-lipped about its potential targets and investment lined up for inorganic expansion into the country, merchant banking sources close to the development said that the company could strike deals close to a billion dollars in the next few months in the software space.

The company's acquisitions in 2006 were in the software space, an area where IBM is bullish about growth prospects in future as well.

However, IBM's potential targets are unlikely to include listed firms as the company considers them as overvalued following the sharp rally in IT stocks over the recent past.

The New York Stock Exchange listed company said, in a communique to its shareholders through a regulatory filing last week, that it plans to continue the accelerated pace of acquisitions in 2007.

The company has invested nearly 16 billion dollars in over 60 acquisitions in the past five years, making it the most acquisitive company in the technology space.

A senior investment banker close to the development said that IBM expects its acquisitions to be targeted for accelerating its presence in emerging and high-growth markets, adding that the company is looking for profitable revenue growth opportunities through its acquisitions.

The company's acquisition strategy would be broadly based on getting a jump start into emerging market opportunities and to add important and missing technology or expertise areas to its portfolio, in addition to expanding market share and reach of products to customers.

"The company invests broadly in research, product development, skilled resources, manufacturing capacity, strategic alliances and, increasingly, acquisitions to deliver higher value solutions to our customers", the company said in its regulatory filing.

"In today's rapidly changing marketplace, one must look at all sources of innovation to sustain one's value proposition to the customer. As a consequence, IBM has become more and more acquisitive," the company's Chief Financial Officer Mark Loughridge said.

The company said that its early performance results on 2006 acquisitions are very strong. In 2006, the company's acquisitions included FileNet (USD 1.6 billion), Internet Security Systems (USD 1.4 billion), Micromuse (USD 0.9 billion) and MRO Software (USD 0.7 billion).

In the fourth quarter of 2006, revenue growth from 2006 acquisitions in total was up about 50 per cent year-over-year, with the majority of acquisitions exceeding their business cases, the company said.