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UTAH TECH WATCH - - by David Politis - - 1/6-8/96 Edition

Nothing like a nice acquisition to get 1996 started off with a bang.

No, Novell's Business Applications Division hasn't been bought yet. But
Salt Lake City's Mainstream Data was.

The acquisition was announced on Tuesday as a done deal as Tempe,
Ariz.-based WavePhore, Inc. announced it had completed the purchase of
Mainstream for $31 million. The deal was for $20 in cash and $11 million
in restricted stock.

For its part, WavePhore said in a news release that it plans to operate
Mainstream "as a wholly owned subsidiary and maintain current
management."

Publicly traded WavePhore (Nasdaq: WAVO) has developed proprietary products
and services for low cost, high speed distribution of digital data, via
the existing worldwide television broadcast infrastructure.

Based upon information included in the acquisition announcement release and
previous news releases from WavePhore, it appears that WavePhore purchased
Mainstream Data for two main reasons.

One, its expertise in operating data broadcasting networks in North
America. And two, its most recent product introduction and most rapidly
growing business: Mainstream Newscast, a broadcast- delivered corporate
news and information resource.

Acquisition telegraphed

Anyone tracking WavePhore during the holidays would have noticed its
announcement on Dec. 27 that it had completed a private placement of $25
million for Series A Convertible Preferred Shares.

Key among the stated reasons for the outside funding was for "corporate
purposes to accelerate our growth, including acquisitions, in the Data
Broadcasting business," said WavePhore chairman, president and CEO, David
Deeds.

Sounds like they already had something in mind.

Ties to Intel

Just for the heck of it, I looked up other WavePhore announcements from the
past 12 months.

Among the most interesting tidbits I uncovered was a May 1995 announcement
of a technology and investment agreement between Intel Corp. and
WavePhore.

Without going into all the details, suffice it to say that WavePhore agreed
to develop technology that will allow Intel products to receive data that
have been transmitted within video television signals. Real Buck Rogers
stuff.

As a result, Intel was to pay WavePhore $500,000 in cash, as well as other
license fees and royalties, and earned the right to purchase up to 250,000
shares of WavePhore stock over the next two years.

Sounds like Mainstream may have gotten itself bought by a pretty
interesting company.

The Year of Acquisitions?

Speaking of acquisitions, although only a week old, 1996 may shape up to be
the "Year of Acquisitions" in Utah's high-tech industry.

Barring some weird event, the purchase of Novell's BizApps division should
be completed no later than mid-April.

And although company management is not "shopping" the company, it would not
surprise me to see one or more companies take a run at acquiring Novell
once the WordPerfect sale is completed. And if not an outright
acquisition, perhaps a strategic partnership formed that would involve a
serious stock position.

Given the strength of the IPO market in 1995, the first sign of weakness in
public offerings will lead many company executives to look again at the
Mergers & Acquisition option. As a result, I expect several of Utah's
high-tech firms to be acquired in 1996.

But that's just my opinion.

An uneasy feeling

During the holidays, Micron Technology announced that it was cutting back
on its use of round-the-clock construction crews on the building of its
Lehi manufacturing facility.

Its stated reasons were simple and believable -- unseasonable weather had
let its work crews get ahead of schedule, and Micron no longer felt it
necessary to pay overtime rates for its construction efforts.

On the surface, its sounds like a smart business decision, and it probably
is.

So why is it that a ton of people keep asking me "What's going on with
Micron?" Don't they believe Micron's official statements for the
construction slow-down?

The company just came off a record year with profits of more than $800
million.

At the same time, however, its stock price has been roughly halved in the
past six months.

And as Forbes magazine reported this summer, there are more than 35 new
memory chip manufacturing facilities around the globe that are somewhere
between completion and beginning construction.

I just wonder if Micron management has decided it's hearing its
competitors' footsteps.

Looks like 1996 will be an exciting year for Utah's high-tech industry.
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A marketing communications consultant that specializes in high-tech and
health care clients, David Politis welcomes column ideas at 801-569-2592
or via the Internet at dpolitis@altatech.com.
 
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