HP second acquisition target is security firm ArcSight

HP said Monday that it had agreed to acquire ArcSight, a security software maker, for $1.5 billion. The acquisition is the company's second since former CEO Mark Hurd resigned amid controversy last month, and appears strategic as it follows a pattern of larger technology conglomerates adding security technologies to their product portfolios.

It is not known whether or not HP ran into competition with other bidders, as the company would not comment on the process in a conference call announcing the deal. HP and Dell battled over virtualized storage company 3PAR last month, pushing the final purchase price to $2.4 billion, more than two times Dell's initial bid for the company.

Although no other company has publicly expressed interest in ArcSight, there is the small possibility that another bidding war could ensue. Other potential suitors such as Oracle, IBM, CA and EMC have been mentioned in press reports over the past week after ArcSight put itself up for sale at the end of August.

Financial analysts do not expect any competing bids as the sale price is close to the maximum of what a similar company would be worth in this market. HP's purchase price is a 24 percent premium of ArcSoft's Friday closing price of $35.10.

The two companies lauded the deal as a way to provide a complete top-to-bottom solution for customers looking to keep their IT deployments secure. "In a world where perimeter security is no longer enough, businesses need this holistic approach to securing their networks, applications and sensitive data," ArcSight president and CEO Tom Reilly said.

ArcSight joins Fortify in HP's security portfolio, which the tech giant acquired in mid-August. Fortify produces technologies that help developers spot security flaws in the code of their software, thus producing more secure applications.