International Business Machinessaid on Wednesday it had acquired XIV, a privately held storage technology company based in Tel Aviv.
Financial terms were not disclosed.
"This is about IBM further strengthening its infrastructure portfolio," Daniel Powers, vice president of mergers and acquisitions at IBM System Storage, told a news conference.
IBM said the deal would boost its position in emerging storage opportunities such as Web 2.0 applications, digital archives and digital information.
Israeli media reported that IBM was paying $300 million to $350 million for XIV, which was founded in 2002.
IBM said the acquisition supports its growth strategy and capital allocation model, as part of its objective for earnings-per-share growth through 2010.
XIV and its 50 employees will become part of IBM's System Storage unit. IBM, which has been operating in Israel since 1949, has between 700 and 800 employees working in research and development in Israel.
XIV Executive Chairman Moshe Yanai said he was the main investor in the company, which did not receive any Israeli government financing. Yanai would not say how much he has invested or what percentage of the company he owns.
Yanai will become an IBM fellow, which is the highest technology position at the company.