IBM has been acquiring firms recently

The acquisition of ISS - which oversees network security and protects against data theft - is aimed at improving IBM's security services for businesses.

ISS, which includes in its 11,000 customers 17 of the world's largest banks, reported revenues of $38.5m during 2005.

If shareholders approve the deal, it should be completed by the end of 2006.

The deal values ISS at $28 a share, an 8% premium on Tuesday's closing price.

The move continues IBM recent string of acquisitions. It recently bought two other firms - document management firm Filenet and MRO Software, which tracks physical assets.