IBM has signed a definitive agreement to acquire Atlanta-based Internet Security Systems in an all-cash transaction worth around $1.3 billion.
The deal values ISS at $28 per share.
ISS provides security services to more than 11,000 customers worldwide including 17 of the world's largest banks.
The services help to protect against Internet threats across networks, desktops and servers. ISS says its software, appliances and services monitor and manage network vulnerabilities and exploits and respond in advance of potential threats.
Val Rahmani, general manager, infrastructure management services, IBM Global Services, says: "This acquisition will help IBM to provide companies with access to trained experts and leading-edge processes and technology to evaluate and protect against threats and enforce security policies."
The transaction is subject to shareholder and regulatory approvals and other customary closing conditions and is expected to close in the fourth quarter of 2006.