With Corporate America awash in data, things have been nice for Informatica Corporation (Nasdaq: INFA), which is a data integration software company. The customer base is solid and relatively stable.

In fact, the company recently posted its Q1 results, with profits up 23% to $11.2 million or $0.12 per share. Revenues increased 19% to $103.7 million and license revenues came to $44.2 million.

But, to maintain its competitive strength, Informatica needs to expand its product edge. To this end, the company agreed to purchase Identity Systems, which is a division of Nokia Corporation (NYSE: NOK).

The transaction comes to $85 million in cash. True, this seems kind of high in light of Identity's revenues of $8 million to $10 million last year. However, Informatica sees big potential in the next couple years. Essentially, Identity is a main player in the identity resolution space, which allows for sophisticated searching of people, companies and products.

There are many applications, such as customer relationship management, data governance, and even detecting money laundering. For the most part, such things rely on lots of manual data entry.

Then again, Identity employs sophisticated technology, which includes things like "fuzzy algorithms."

So far, Identity has more than 500 customers. But, with the extra distribution – and marketing possibilities – of Informatica, footprint should expand quickly, especially with the imperatives for security, compliance and homeland security. What's more, the deal should provide more heft against a major competitor, International Business Machines Corp. (NYSE: IBM).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.