Computer Associates (CA) is to acquire Netegrity, a computer security firm in an all-cash deal valued at $430m, or $10.75 per fully diluted share. The deal sees the company add to its security product portfolio, following the $50m purchase of anti-spyware firm PestPatrol, this August.

CA last week announced 800 redundancies in cost-saving moves designed to give it more room to pursue an aggressive acquisition strategy. Some jobs are to go at Netegrity too, although CA says it will retain the majority of the company's 400 employees.

Officially a merger, the agreement is subject to regulatory and shareholder approval. CA expects it will close the deal in 90 days, and claims the support of 10 per cent of Netegrity's voting shareholders already.

Computer Associates recently settled with the US Department of Justice and the Securities Exchange Commission over a $2.2bn accounting fraud, which saw sales booked too early as revenue. It is paying $225m restitution to shareholders. ®

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