UPDATE 2-Pegasystems to buy Chordiant Software for $162 mln

* Pegasystems to pay $5.00/share for Chordiant

* Offer at 31 pct premium

* Sees deal adding to adjusted EPS in 2010, 2011

* Chordiant, Pegasystems shares jump to year-highs (Adds analysts' comments, background, share activity)

By Mansi Dutta

BANGALORE, March 15 (Reuters) - Chordiant Software Inc CHRD.O, a supplier of customer relationship management software and services, agreed to be acquired by Pegasystems Inc (PEGA.O) for $161.5 million in cash.

The $5-per-share agreement is at a premium of 31 percent to Chordiant stock's closing price Friday.

The deal should be done and executed fairly quickly as $5 is a fair price, said Wedbush Morgan Securities analyst Derrick Wood.

"I don't expect any other bidders to come in at a higher price. I don't expect any DoJ concerns," Wood said.

On Jan. 6, CDC Software Corp CDCS.O said it sought to acquire all of the remaining outstanding shares of Chordiant for $105.1 million. But it withdrew the move a week later, selling its 1.3 percent stake in the company.

"I don't think they'll (CDC) come to the table at this price," analyst Wood said.

"Chordiant has a BPM type technology which I think is complementary to Pegasystems' BPM software (that makes up their core product) ... so for Pegasystems it gives them added vertical strength and from a financial perspective it gives them accretion," Wood said.

Oppenheimer & Co analyst Brad Reback said it's a good action for Chordiant shareholders, and the company brings interesting opportunities to Pegasystems from a product and a vertical standpoint.

The agreement marks another step in the continuing consolidation of enterprise software providers, said Donald Light, analyst at Celent, a Boston-based financial research and consulting firm.

"The acquisition adds to the strength Pega has shown in recent years in many sectors, certainly including insurance," Light said.

He said Chordiant brings a similar multi-industry set of relationships, and adds depth to Pega's CRM offerings.

Pegasystems said significant closing costs, integration expenses and other purchase accounting valuation charges will be dilutive to GAAP reported earnings.

But on an adjusted basis, the deal is expected to add as much as 3 cents to Pegasystems' 2010 earnings per share and 20 cents to its 2011 EPS, the provider of business process management (BPM) software said.

Chordiant reported revenue of $76.3 million, with $52.3 million of cash and investments, in 2009.

The deal is likely to close in the second quarter of 2010.

Chordiant's customers include Time Warner Cable (TWX.N), T-Mobile, and Royal Bank of Scotland (RBS.L).

Bridge Street Advisory Services, a division of Financial Telesis Inc, is the financial advisor to Pegasystems, while Morgan Stanley & Co is the financial advisor to Chordiant.

Chordiant shares rose 31 percent to $4.99, while Pegasystems shares rose 6 percent to a new year-high of $39.26 in morning trade Monday on Nasdaq. (Reporting by Mansi Dutta; Editing by Gopakumar Warrier)