International Business Machines plans to buy technology services company SPSS Inc for $50 a share, in a cash deal valued at about $1.2 billion, the companies said on Tuesday.

The deal represents a 42 percent premium to Monday's Nasdaq closing price of $35.09 for SPSS, a Chicago-based company that that provides predictive analytics technology and services.

IBM said the deal will help expand its Information on Demand software portfolio and business analytics capabilities.

The acquisition, which is subject to SPSS shareholder approval and regulatory clearances, is expected to close later in the second half of 2009, the companies said.

(Reporting by Franklin Paul; Editing by Derek Caney)