Intel Takes Small Step Toward IBM Model

Updated from 12:14 p.m. EDT

Intel (INTC) said it will acquire Wind River Systems (WIND) in a deal worth $884 million, a sign the chipmaker may be shifting toward IBM's (IBM) approach to doing business.

Intel said it will pay $11.50 a share for Wind River, which represents a 44% premium above the stock's closing price on Wednesday. The deal is expected close during the summer, as Wind River's board of directors has unanimously approved the transaction.

Shares of Wind River surged 47% to $11.76. Intel shares tacked on 1.2% to $16.13.

Wind River enables companies to develop, run and manage device software faster. Intel said the acquisition will become part of its strategy to grow its processor and software presence outside the traditional PC and server markets. Wind River's growth areas include smartphones, in-car and other automotive systems, aerospace and defense, and energy markets.

Wind River's Linux operating systems and middleware for multimedia devices and automotive systems compete with Microsoft (MSFT). Previously, Wind River had partnerships with companies such as Texas Instruments (TXN) and IBM.

Craig Berger, an analyst with FBR Capital Markets, said that the acquisition of Wind River is an early step in shifting Intel's business model toward that of IBM's approach. "If Intel is beginning to diversify its business away from just semiconductors, we would expect a host of similar software or services-related acquisitions in coming years," Berger said.

In 2007, IBM reportedly eyed a bid for Wind River in order to establish a stronger presence in the embedded operating systems market.