Updated with dividend information and current stock price

ARMONK, N.Y. ( TheStreet) -- IBM ( IBM) has thrown down $1.2 billion to acquire publicly traded software specialist SPSS ( SPSS), as the tech bellwether attempts to boost its data mining and statistical analysis story.

The two firms announced early Tuesday that they had entered into a merger agreement, an all-cash transaction priced at $50 a share, or a total of $1.2 billion.

Chicago, Ill.-based SPSS sells a slew of software products encompassing data collection, modeling, and analysis. Firms typically turn to SPSS when they want to streamline their data handling and improve their data mining, and the company has racked up some big-name customers including Lloyds TSB, Credit Suisse and British Telecom.

SPSS, which competes with SAP ( SAP), also sells its technology into markets such as health care, manufacturing, retail, government and education. All 50 U.S. state governments use SPSS analytics software, according to the Midwest firm.

IBM, which courted Sun Microsystems ( JAVA) prior to its $7.4 billion acquisition by Oracle ( ORCL) earlier this year, is clearly still willing to open up its wallet.

The hardware and software behemoth also bought a privately held security software specialist called Ounce Labs Tuesday and has now acquired a total of 80 companies since Sam Palmisano became CEO in 2002. In software alone, the firm has made a whopping 50 purchases since 2003.

This is also not the first time that IBM has spent big on business analytics, and follows the company's $5 billion acquisition of Cognos in 2007.

"With this SPSS acquisition, we are extending our capabilities around a new level of analytics that not only provides clients with greater insight -- but true foresight," said Ambuj Goyal, general manager of IBM's Information Management business, in a statement. Predictive analysis can help clients move beyond the "sense and respond" to "predict and act," he added.

Software sales accounted for almost a quarter of IBM's revenue during the second quarter, despite slipping 7% year over year to $5.2 billion. IBM CFO Mark Loughridge also re-affirmed the company's commitment to business analytics during the second-quarter earnings call. Areas such as electronic records, education, smart grids, and financial risk management are creating growing demand for this type of software, he said.

IBM's SPSS acquisition is expected to close in the second half of 2009.

IBM's board also approved a regular quarterly dividend of 55 cents Tuesday, which will be payable to shareholders in September.

Shares of IBM slipped $1.15, or 1%, to $116.48 in Tuesday trading.

-- Reported by James Rogers in New York

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