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In a bid to expand its product offering, IBM (NYSE: IBM) has agreed to acquire data analytics company Netezza Corporation (NYSE: NZ) in a $1.7 billion cash deal.

Marlborough, Massachussetts-based Netezza, which employs approximately 500 people, analyzes information through a data warehousing appliance that can handle queries at streaming speeds of up to milliseconds.

The appliance can be used in every department of an organization such as sales, marketing, product development and human resources.

The acquisition, which is priced at $27 per share or a 10% premium to Netezza's Friday closing price, will help expand IBM's business analytics initiatives, helping clients receive faster insights into their business information at a lower cost. For example, companies can forecast and respond to pricing or tariff changes quickly, enabling them to remain competitive.

More than 350 clients have adopted Netezza across a wide range of industries, including eHarmony, Neiman Marcus (NMG), Time Warner (NYSE:TWC), Estee Lauder (NYSE:EL), Unitedhealth Group (NYSE:UNH), Nationwide Insurance, NYSE Euronext (NYSE:NYX) and Virgin Media, among others.

In the last four years, IBM has invested more than $12 billion in 23 analytics-related acquisitions and in the second-quarter of 2010, its analytics business grew 14%.

IBM is not the only major computer company making these types of acquisitions, as an increasing number of them look to expand their products and services. Last month, Hewlett Packard (NYSE:HPQ) beat Dell (NASDAQ:DELL) in a war to acquire data storage company 3Par (NYSE:PAR), paying around $2 billion. Last week, HP also announced it would acquire network security business Arcsight (ARST) for $1.5 billion.

The Netezza acquisition, which is subject to Netezza shareholder approval, regulatory clearances and other customary closing conditions, is expected to close in the fourth quarter of this year.

Following the close of the acquisition, IBM expects to combine Netezza within its information management software portfolio.

Netezza was up more than 12% to $27.76 as of 11:49 am ET on Monday, while IBM rose 0.95% to $131.43

Disclosure: No position

Source: IBM Continues Acquisition Trend for Major Computer Companies