Computer builder Hewlett-Packard, located in Palo Alto, was started by William Hewlett and David Packard, both Stanford graduates.
It's one of a string of deals that has taken HP beyond the low-margin personal computer market. It agreed to buy the data-storage maker 3Par for $2.07 billion just a few weeks ago.
The ArcSight deal is just the latest that demonstrates how HP is making itself more diverse. Rather than just making and selling computers and printers, the Silicon Valley giant is investing in service companies.
The acquisitions extend a strategy begun under former CEO Mark Hurd, who was forced to resign last month after a company investigation found that he faked expense reports to cover up a relationship with an outside contractor. HP is suing Hurd, who has denied the allegations, to keep him out of a job at rival Oracle Corp.
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. Its revenue in the most recent fiscal year came to about $181 million.
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.
ArcSight shares climbed $8.91, or 25.4 percent, to $44.01 -- above the offered price -- in pre-opening trading. Shares of HP, which is based in Palo Alto, Calif., rose 33 cents to $38.53.