HP is to acquire IT asset and service management software vendor Peregrine Systems in a cash deal for $425 million, the two companies announced Monday. By integrating Peregrine's products into its HP OpenView systems management suite, HP hopes to position itself as one of the market leaders in asset management software.

The deal is subject to the approval of Peregrine shareholders and regulators and values Peregrine at $26.08 per share. The HP offer amounts to a $6.98 premium over the closing price of company shares Friday. In trading late Monday morning, Peregrine shares jumped by $6.30 on the news.

HP expects to close the deal no later than the first quarter of 2006, according to a company release.

Founded in 1981, Peregrine is based in San Diego and has offices elsewhere in the U.S. as well as in Canada and Brazil and in a number of locations Europe and in Asia-Pacific. Peregrine employs around 700 staff and its customers include Cingular Wireless, Circuit City Stores and Credit Suisse Group, according to information on the company's Web site.

HP also announced Monday that it has signed a definitive agreement to acquire AppIQ , a provider of storage area network management software. HP declined to put a dollar figure on the purchase. The deal is expected to close within 45 days, according to an HP release, when HP will fold the AppIQ business into its StorageWorks division.

The IDG News Service is a Network World affiliate.