Hewlett-Packard (HPQ) will purchase cybersecurity software company ArcSight (ARST) for $1.5 billion, or $43.50 a share.
The deal will close by the end of this year, the companies said in a statement.
"The combination of HP and ArcSight will provide clients with the ability to fortify their applications, proactively monitor events and respond to threats," said Bill Veghte, HP's executive vice president of software and solutions.
HP will make a cash tender offer for all of ArcSight's outstanding shares of common stock. The deal is subject to customary closing conditions.
The deal continues HP strategy of increasing its presence in the market for services, and reducing its dependence on building computers.