Computer Associates International Inc. (CA) announced Wednesday that it plans to buy identity and access management software maker Netegrity Inc. of Waltham, Massachusetts, for US$430 million in cash.

CA will pay approximately US$10.75 per share for Netegrity’s stock, which closed the trading day Tuesday at US$7.75 a share. CA will integrate Netegrity’s identity and access management products with its eTrust Identity and Access Management group, as it looks to strengthen its position as a provider of network security management products, the company said.

Netegrity makes software and technology that allows companies to manage user-identity data, such as logins and passwords, across networks and the Internet. Companies use Netegrity’s products to simplify user management and administration between legacy equipment, Web and service-oriented architectures, an increasingly complex problem as companies introduce Web-based applications and portals for employees, business partners and customers.

Islandia, New York-based CA already sells identity and access management technology under its eTrust brand, but said that it was interested in Netegrity’s strength in user access, user provisioning and security policy technology to manage Web-based applications, such as the company’s SiteMinder, IdentityMinder and TransactionMinder products.

The acquisition would be CA’s biggest in several years. CA expects to complete its acquisition of Netegrity in the next 90 days and said the effect of the acquisition would be “neutral” for fiscal year 2005.

Nevertheless, the US$10.75 per share price reflects quite a premium for Netegrity’s stock. Shares in the company have been trading well below US$10 for most of 2004, and were trading below US$6 just one month ago.

In a statement CA’s Chief Operating Officer Jeff Clarke said that CA “conducted extensive due diligence of Netegrity,” and that he is “confident this acquisition will deliver a financial return in excess of our weighted average cost of capital.”