HP has bought Mercury Interactive for $4.5 billion.
The deal that will combine Mercury's suite of application management software and services with HP's OpenView family of network and IT service management software. It is subject to a number of conditions, but should close by the end of the year.
Mercury is a leader in the emerging area of business technology optimisation (BTO) - products that manage and track the performance and profile of enterprise applications and reduce the costs associated with deploying them.
Together with HP's OpenView platform, the purchase will allow HP to become an "end to end" IT management company with products that can track IT assets from planning through deployment and operations, said HP's software VP Thomas E. Hogan.
Mercury has been sailing in choppy waters in recent months. An SEC investigation probe of the company's accounting methods in 2005 led to the resignation of the company's CEO and CFO in November, 2005. The company was then delisted from the Nasdaq Stock Market in January.
In early July, the company was forced to restate its earnings for fiscal years 2002 to 2004 because previous statements did not recognise compensation from internal stock option grants.
Despite its accounting woes, the company has continued to grow. The company purchased SOA vendor Systinet for $105 million in January, then last month announced plans to spend another $18.5 million buying technology from Vertical Solutions Inc (VSI) and research and development staff and facilities from Tefensoft.