CA is buying Arcot Systems, the privately held subscription-based on-premises and cloud authentication and fraud prevention ISV, for $200 million cash.

Its software and 165 employees are bound for CA's Identity and Access Management (IAM) unit to be combined with CA's SiteMinder portfolio and is supposed to add to the company's cloud security strategy.

Arcot claims to prevent fraudulent transactions for about a million online credit card transactions a day using a software-only approach. It co-wrote the 3-D Secure protocol for online payment security with Visa and has 35 patents awarded or pending.

The advanced authentication market, a segment of the overall IAM sector, is expected to grow at low double digits over the next four years. CA figures to exploit Arcot's cross-sell opportunities.

It said 90% of Arcot's revenue is recurring and it's got nearly 100% customer retention.

The 13-year-old company has been cash-flow positive since the second quarter of 2009.

The acquisition will dilute CA's GAAP earnings per share in fiscal 2011. The deal should close by the end of September.

Arcot's investors include Accel, Abode, Goldman Sachs, Invesco, Onset Ventures, Raza Ventures, Wells Fargo, Visa, Verdanta Capital and Scandinaviska Enskilda Banken.

CRN observed that CA must have spent a billion dollars so far buying cloud widgetry: Arcot and Nimsoft together cost $550 million and then there's been 4Base, 3Tera, Oblique and Cassatt on undisclosed terms.