By Katie Hoffmann and Hugo Miller (Bloomberg) – CA Inc., the second-largest maker of software for mainframe computers, agreed to buy closely held Nimsoft Inc. for about $350 million to expand in cloud computing.

The all-cash deal will probably hurt earnings in fiscal 2011, the Islandia, New York-based company said today in a statement. CA expects the transaction to close by March 31, when the company’s current fiscal year ends.

Nimsoft’s products help customers monitor so-called cloud systems, which access computers, applications and data through the Internet. The acquisition is CA’s third this year as Chief Executive Officer Bill McCracken steps up competition with larger rivals, including International Business Machines Corp. The companies are chasing a cloud-computing market projected to top $40 billion within three years.

CA was little changed in late trading after closing at $22.60 today on the Nasdaq Stock Market. The stock has gained less than 1 percent this year. The company announced the transaction after the close of regular trading.

The majority of Nimsoft’s 120 employees, including Chief Executive Officer Gary Read, will join CA once the deal is complete. Redwood City, California-based Nimsoft, founded in 1998, has about 800 customers, mostly in the U.S. and Europe.

CA agreed to buy closely held 3Tera Inc. for an undisclosed sum last month and Oblicore Inc. in January. Spending on cloud computing will rise to $44.2 billion by 2013, according to research firm IDC in Framingham, Massachusetts.

–With assistance from Rochelle Garner in San Francisco. Editors: Julie Alnwick, Ville Heiskanen

To contact the reporters on this story: Katie Hoffmann in New York at khoffmann4@bloomberg.net; Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Julie Alnwick at jalnwick@bloomberg.net

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