An item in the wall Street Journal (wsj.com) reports that Rambus (ticker symbol RMBS), a Silicon Valley chip company known for memory technology, is seeking to branch out in other directions via its acquisition of a small computer security company.

Cryptography Research, a closely held company based in San Francisco, develops technology that is typically built into computer chips for chores like protecting digital content from piracy and detecting counterfeit products. Under the deal, Rambus said it will pay $167.5 million in cash and approximately 6.4 million shares of Rambus stock, along with $50 million payable to CRI employees in cash or stock over three years. The total value of the deal is $342.5 million.

Rambus Chief Executive Harold Hughes said the deal is by far his company’s largest. He predicted it will pay off in multiple ways, including by bringing creations of Cryptography Research to a larger audience of companies. “We think its spectacular technology,” he said. The small 30-employee company, while growing and profitable, opted for the deal rather than try to replicate capability like that of Rambus to broadly license its technology.

Rambus was founded in 1990 to develop technology to accelerate the performance of memory chips, subsequently weathering a series of battles with large electronics companies over patent rights and other issues. The company has lately diversified into technologies such as lighting and computer displays, while sticking to its strategy of licensing inventions to other companies rather than selling products to end users.

The stock price for Rambus has been struggling for quite some time, down since the beginning of the year and mired under its 200 day moving average, currently trading just under $19.00 per share and so far unaffected by announcement of the acquisition.