BMC Software (Nasdaq: BMCS) agreed Monday to buy Boole & Babbage (Nasdaq: BOOL) in a stock swap valued at $900 million (£533 millionn). Officials said earnings would be "accretive from day one" of the merger. The price is based on BMC's closing price on October 30 at 48 1/16. Boole & Babbage shares closed at 26 5/8, down 1 on Friday. Under the agreement, BMC (financials) will issue .675 shares of its common stock for each share of Boole & Babbage common stock. The transaction, which is expected to close within 60 to 90 days, will be accounted for as a pooling of interests. As a result of the deal, Boole & Babbage stopped its share buyback plan. The merger is expected to place BMC as the third largest mainframe software company behind IBM (NYSE: IBM) and Computer Associates. BMC makes software that allows large computers, or mainframes, to run on large corporate networks. Boole & Babbage (financials) makes software that allows different networks, PCs, and operating systems work together. The combined company will employ 4,400 people in 26 countries and have annual revenue of about $1.1 billion (£0.65 billion). In a conference call, BMC executives said there won't be any planned layoffs because of the merger. "We view this as a revenue gain, not a cost gain," said BMC chief Max P. Watson Jr. "The product synergies are there because we were headed in the same direction." "We're bullish, we think you'll see a growth rate everybody will be impressed with," said Watson, who said margins would remain at current levels. William M. Austin, chief financial officer of BMC, said the merger will be accretive to earnings with significant revenue gains ahead. "The goal is to get Boole's growth rates up to BMCs," said Austin. "It's a solid, well run company." Paul Newton, president and CEO of Boole & Babbage, said the merger will give Boole critical mass. Newton said growth rates were hampered because Boole wasn't big enough "to be in front of all customers." Earlier this year, BMC bought BGS Software for $285 millionn (£168 million). Boole & Babbage also bid for BGS. BMC shares slumped last month on concerns about client-server revenue. Other software companies have also struggled. CA has faced a similar plight as many companies have held back purchases because of concerns about Asia.