Aether Systems Inc., (Nasdaq:AETH), a leading provider of wireless data products and services, announced today that it has signed a letter of intent to acquire Cerulean Technology, Inc., a leading provider of wireless mobile software in the public sector.
The acquisition allows Aether to enter new vertical markets in the public sector by delivering advanced wireless products and services to the rapidly expanding mobile government marketplace. Based on industry research reports and U.S. Bureau of Labor statistics, the market for mobile data products across the government represents an estimated 3.7 million users and over $1 billion in products and services by 2003.
The letter of intent provides for a purchase price of $150 million, up to 50 percent of which may be payable in Aether stock. The acquisition is subject to board approval, negotiation of definitive documentation, satisfactory due diligence and regulatory approvals. The letter of intent provides for execution of definitive agreements by August 25, 2000 and Aether expects the acquisition to close in the next six to eight weeks.
"Aether looks for three valuable resources in its merger and acquisition strategy: entry into new vertical markets; a recurring revenue model; and engineering bandwidth. The acquisition of Cerulean brings us all three of these crucial elements," said Dave Oros, Chairman and CEO of Aether Systems. "Cerulean is far and away the leader in their industry and we are very excited about joining forces with them. Together we plan to make mobile government a reality across the public sector, by making it easier to deploy and maintain wireless mobile systems."
Today, more than 45,000 users at 700 public safety agencies use Cerulean's PacketCluster family of mobile applications to better protect cities and towns and keep public safety agencies running more efficiently and safely. By combining forces with Aether, Cerulean will be able to extend its industry-standard product line with new handheld products and Web-based services.
"As the public safety mobile market evolves beyond in-vehicle laptops to handheld devices, more customers are looking for packaged systems that incorporate the application software, devices, air time and ongoing support in a turnkey solution for a monthly fee," said Bob Badavas, CEO of Cerulean. "As part of Aether, Cerulean will be able to more easily meet this demand by offering hosted data services, managed through Aether's network operations center. By combining our companies, public safety agencies and the broader world of mobile government will continue to blaze new trails as wireless data enters the next phase of its evolution."
The Rise of Mobile Government
Public safety agencies have been the early adopters of wireless mobile technology, driving the marketplace to refine and improve mobile technology products. Having seen the productivity, economic, safety and community relations benefits derived from deploying mobile technology, other government agencies are beginning to adopt wireless mobile computing, fueling a movement towards a "mobile government."
Other government sectors that are beginning to employ mobile devices to receive real-time information wirelessly include public works, municipal services, health and human services, courts and corrections, and municipal utilities. Examples of the types of real-time, wireless applications required to deliver on the promise of mobile government are:
-- Dispatch information access
-- Remote data access
-- Field data collection and reporting
-- On-site inspections
-- Scheduling and personnel management
World Class Applications and Services for Mobile Government
With the resources of Aether, Cerulean will develop and gain access to applications that address the needs of all mobile government across federal, state and local levels. The combined entity will leverage the strength of Aether's mobile and wireless technology products and world class wireless hosting and consulting services, and Cerulean's leading wireless mobile applications. Customers will benefit from:
-- A single, extensible wireless application platform that can be
used across multiple government markets supporting any
application, wireless infrastructure or device.
-- The strength of Aether's wireless data technology, including
its industry standard Scoutware family of software products,
support services expertise and industry leading partners,
combined with Cerulean's wireless public safety and government
applications experience, expertise and partners.
-- The ability to provide customers with their choice of end to
end wireless application solutions based on purchase or hosted
service models.
-- Integration of Cerulean's public safety and government
applications with Aether's wireless web applications such as
communication services and industry focused content access.
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