RESEARCH TRIANGLE PARK, N.C. — IBM is acquiring Atlanta-based Internet Security Systems in a $1.3 billion deal.

The acquisition is the fifth largest in IBM’s history.

ISS focuses on network security solutions. The company will become part of IBM’s Global Technology Services group, which has a major presence in RTP. Many of those personnel focus on security-based consulting services, according to an IBM spokesperson.

IBM (NYSE: IBM) is paying $28 a share in cash for ISS (Nadaq: ISSX). ISS shares climbed more than 6 percent, trading at $27.65 in midmorning trading. IBM was up 4 cents at $78.99.

The deal is the largest for IBM’s Global Services group since the acquisition of Price Waterhouse Consulting in 2002.

ISS has thousands of clients worldwide. The company provides a variety of pre-emptive solutions to protect networks and individual machines from security threats. ISS also offers consulting services.
IBM, estimating the global security market at $32 billion, said the acquisition is part of its strategy to provide software-based solutions.

“Companies recognize that rapidly evolving security threats and complex regulatory requirements have turned security into a mission-critical priority,” said Val Rahmani, general manager, for Infrastructure Management Services at IBM Global Services. “ISS is a strategic and valuable addition to IBM’s portfolio of technology and services. This acquisition will help IBM to provide companies with access to trained experts and leading-edge processes and technology to evaluate and protect against threats and enforce security policies.”

ISS operates a network of security operations center, including locations in Atlanta, Detroit, Tokyo, Brussels and Brisbane.

“Clients increasingly recognize that security must become a network-integrated business process rather than a reactive response to individual threats,” said Tom Noonan, president and chief executive officer of ISS. “By delivering an integrated security platform that is adaptable and extensible to address new threats and business requirements without incremental complexity and cost, ISS has delivered the foundation for delivering security as a service. These on-demand capabilities, together with our managed security services, appliances and software will further bolster IBM’s leading security services and products as we take this innovation out to a larger, global stage.”

ISS was founded in 1994 by Christopher Klaus, a student at Georgia Tech. Noonan joined the company as president in 1995. ISS went public in 1998.

ISS: www.iss.net

IBM: www.ibm.com