H-P to Snatch Up Opsware

Updated from 9:27 a.m. EDT

Hewlett-Packard(HPQ) added the latest piece to its growing software puzzle Monday, with a $1.6 billion acquisition of Opsware(OPSW).

The deal brings a fast-growing, though money-losing, company with key technology under H-P's roof, bolstering H-P's efforts to become a one-stop shop for corporations building expensive back-end data centers.

The all-cash tender offer of $14.25 a share represents a 38% premium of Opsware's most recent closing price of $10.28.

News of the deal sent Opsware's shares soaring 36%, or $3.75, to $14.03 in midday trading Monday.

The deal is the latest in a string of big-ticket software acquisitions by H-P. In 2006, it purchased Mercury Interactive for $4.5 billion , and H-P picked up Peregrine Systems for $425 million in 2005.

H-P said the deal with Opsware will improve its ability to automate jobs like setting up servers and networks as well as managing ongoing changes at its customers' data centers.

"The acquisition of Opsware is intended to enable H-P Software to help our customers resolve one of the critical pain points: controlling the increasing complexity and cost of managing the data center," said H-P Software VP Thomas Hogan in a statement.

Sunnyvale, Calif.,-based Opsware was founded by Marc Andreessen, the Internet pioneer who created the original Netscape Web browser. Opsware CEO Ben Horowitz will lead H-P's business technology optimization group after the deal closes, reporting to Hogan.