Founded in 1981, Peregrine is based in San Diego and has offices elsewhere in the U.S., as well as in Canada and Brazil and in a number of locations in Europe and the Asia-Pacific region. Peregrine employs about 700 staff and its customers include Cingular Wireless LLC, Circuit City Stores Inc. and Credit Suisse Group, according to the company's Web site.

Peregrine has had a troubled financial past. The company filed for Chapter 11 bankruptcy in September 2002 after accounting irregularities led to an investigation by the U.S. Securities and Exchange Commission. The irregularities eventually totaled $250 million.

In order to cut costs during 2002, Peregrine halved its staff, closed offices and sold off its Remedy service management business to BMC Software Inc. Peregrine emerged from Chapter 11 in August 2003 and has been playing catch-up with restating its SEC financial filings ever since. Eight former Peregrine executives were indicted in October 2004 by a federal grand jury and charged with conspiracy to commit multibillion-dollar securities fraud from March 1999 through May 2002.

DeLaughter noted that HP has been monitoring Peregrine's financial status closely for some time. "We've confirmed there's no unknown risk" in acquiring Peregrine, he said, adding that some mechanisms in relation to the firm's restating of its financials are still ongoing.

Given its long-standing close relationship with Peregrine, IBM might have seemed a more likely buyer. DeLaughter downplayed the June expansion of a strategic alliance between IBM and Peregrine as simply renewing an existing agreement between them. "Our intention is to support IBM customers and IBM Global Services," he said. "Going forward, we'll use HP's own services arm" to provide support.