IBM announced today that it will buy California-based Enterprise Content Management (ECM) vendor FileNet in an all-cash deal valued at $1.6 billion. The is IBM's largest acquisition in about four years.FileNet will be IBM's largest takeover target since the $2.1 billion deal for Rational in 2002. The all-cash deal values FileNet at $35 a share, which is a hair above FileNet's $34.65 Nasdaq closing price on Wednesday. The FileNet acquisition is subject to regulatory and shareholder approval, but is expected to close in the 4th quarter of this year. This is IBM's second large software acquisition in the last week. On the third of August IBM agreed to buy MRO Software, Inc. in an all cash deal worth $740 million. MRO is a specialized provider of software for managing physical assets. FileNet, founded in 1982, has 1,700 employees and did $422 million in 2005 revenues. IBM plans to merge FileNet's employees and software assets into their Content Management software group.