Intel plans to buy testing and development software maker Wind River Systems for $884 million.
The Santa Clara-based chip maker says it will acquire all outstanding Wind River common shares for $11.50 each, which represents a premium of 44 percent over Wind River's Wednesday closing price of $8.
Alameda-based Wind River's software helps companies develop and test software for devices like rear-seat entertainment systems in cars and avionics in defense aircraft.
The company was founded in 1981 and has over 1,600 employees.
Intel said the acquisition will help it expand its processor and software offerings for embedded systems and mobile devices. The deal is expected to close this summer.