IBM is to acquire security tools and services firm Internet Security Systems in an all-cash deal valued at $1.3bn, or $28 per share. The deal is expected to close in the fourth quarter of 2006, subject to approval by regulators and ISS' shareholders.

ISS markets a range of intrusion detection and vulnerability assessment tools and services designed to secure corporate networks. It competes with firms such as Symantec and Counterpane.

IBM said bringing ISS into its fold will boost its IT services business, particularly in the area of managed security services.

Following the completion of the acquisition, ISS will join IBM as a business unit within IBM Global Services' Security organisation. ISS' software technology with be integrated into Tivoli's IT service management portfolio, which already includes software for identity management, access control, and security information management. IBM plans to harness ISS' X-Force security intelligence service to provide its clients with more timely security advice.

According to a statement, ISS has more than 11,000 customers worldwide including 17 of the world's largest banks.

Post-acquisition, IBM intends to sell ISS' managed services, software, and security appliance products through IBM's and ISS' worldwide sales channels and business partners. ®

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