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Printable Version

Aether Continues Expansion Effort

By Dina ElBoghdady
Washington Post Staff Writer
Wednesday, September 20, 2000 ; E03

Aether Systems Inc., a fast-growing provider of wireless data services and software, spent $10.8 million in cash yesterday to buy a West Coast software company that enables fire departments and rescue crews to use handheld devices at emergency scenes.

The acquisition of Sunpro Inc. of Zillah, Wash., is part of Aether's broader effort to spread its wireless technology into potentially large markets, such as public safety agencies. The Sunpro deal comes on the heels of Aether's $150 million acquisition in August of Cerulean Technology Inc., a Marlborough, Mass., provider of wireless communications software for police and fire departments.

Yesterday's acquisition is the Owings Mills, Md.-based company's seventh since September 1999. Its buying spree has helped Aether expand its business from financial services into markets such as health care, education, transportation logistics and sales-force automation. But it has yet to deplete its war chest. The company still has about $1.1 billion in cash after having raised $1.4 billion in a secondary stock offering in March.

"We're going to be aggressive," Gregg Smith, Aether's vice president of business affairs, said about the company's array of deals. "We want to build a leadership role" in every market, he said.

With the Sunpro and Cerulean acquisitions, Aether is building on its efforts to target government as a customer. Aether plans to combine the two companies, which together provide software for nearly 3,000 fire and rescue agencies in the United States and Canada.

Together, Cerulean and Sunpro provide software that enables emergency crews on the scene of a fire, for instance, to access blueprints of a burning building or to send reports on victims and their injuries to a hospital long before they are admitted.

Jason Bell, an associate analyst at Robinson-Humphrey Co. in Atlanta, said Sunpro is a good and cheap fit for Aether.

"They are trying to make Aether's name synonymous with wireless data," Bell said. "I think they can continue to grow through these types of acquisitions."

The only potential pitfall for Aether would be acquiring companies that don't mesh well with it, said Peter Friedland, a senior analyst at WR Hambrecht & Co.

"But Aether has made a bunch of acquisitions to date and they have done a good job of integrating those businesses," Friedland said. "I view it as a positive purchase, in line with their strategy . . . to acquire companies that get them into new markets or . . . to enhance their platform."

Shares of Aether gained $3.31, or about 2.6 percent, to close at $132.25 in Nasdaq trading.


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