HP will pay $52 per share for Mercury in a deal that will combine that company's suite of application management software and services with HP's OpenView family of network and IT service management software, HP said in a statement.

The deal is subject to a number of conditions, but it scheduled to close in the fourth quarter of 2006. Among other things, Mercury will have to file an Annual Report on Form 10-K for fiscal year 2005 before the deal can be consummated, HP said.

Mercury is a leader in the emerging area of BTO (business technology optimization) products that manage and track the performance and profile of enterprise applications and reduce the costs associated with deploying them.

Together with HP's OpenView platform, Mercury's strength in BTO, application change management, and IT governance will allow HP to become an "end to end" IT management company with products that can track IT assets from planning through deployment and operations, according to a statement by Thomas E. Hogan, senior vice president of software at HP.

Mercury has been sailing in choppy waters in recent months.