The deal is part of a strategy begun under former CEO Mark Hurd, with the company looking to grow outside the low-margin personal computer market. It agreed to buy the data-storage maker 3Par for $2.07 billion just a few weeks ago after a bidding war with rival Dell Inc.
The acquisitions have continued even after Hurd's departure. He was forced to resign last month after an internal investigation found that he filed inaccurate expense reports related to an outside contractor. HP is suing Hurd, who has insisted he didn't file his own expenses, to keep him out of a job at rival Oracle Corp.
The most recent deal does not appear to have set HP on a markedly different path. "A software acquisition was highly expected for HP and the deal makes sense, providing a good fit with HP's existing security offerings," Barclays Capital analyst Ben Reitzes told investors in a research note Monday.
ArcSight Inc., based in Cupertino, Calif., helps organizations keep tabs on the data flowing through their computer networks and analyze it for signs of hacking, theft or fraud. It has about 412 employees and took in revenue in the most recent fiscal year of about $181 million, just under a third of it from federal government agencies.
This isn't HP's first foray into security. It bought 3Com Corp. this year for $2.7 billion, giving HP network security products through 3Com's TippingPoint division.
On Monday, HP said it would offer ArcSight stockholders $43.50 per share in cash. That's a 24 percent premium over the ArcSight's closing share price Friday and a 54 percent premium over ArcSight's last closing share price before news of a potential deal leaked.
Shares of HP, which is based in Palo Alto, Calif., lost 3 cents to $38.17 in midday trading Monday. ArcSight shares gained $8.82, or 25 percent, to $43.92 above HP's offer price, suggesting that investors believe another company might respond with a higher bid.