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
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 &
"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
Shares of Aether gained $3.31, or about 2.6 percent, to close at $132.25 in
© 2000 The Washington Post Company