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Fore continues shopping spree

Rumors swirl that Fore received a lot of Christmas money as the company buys Cadia Networks, its third acquisition in two months.

Asynchronous transfer mode (ATM) giant Fore Systems (FORE) must have received a lot of Christmas money this year.

On the heels of two December acquisitions totaling more than $50 million, Fore announced today that it has acquired privately held Cadia Networks of Andover, Massachusetts for approximately $150 million.

Cadia makes high-end, wide area network adapters and concentrators for the Internet service provider market that allow multiple types of data to flow into one set of hardware ports. With the acquisition, Fore hopes to expand an already burgeoning presence in the ISP and telecommunications carrier space.

"[Cadia] can take a huge number of these ISP connections in and can handle any type of service--such as frame relay, ATM, PPP, among others--on any type of port," explained Dave Nelsen, Fore's senior director in its Outbound Technology Group. "This is a space where we really didn't have product."

"Now, if you're a carrier or ISP, you can buy one product and use it for whatever your customers are demanding," he said. The Cadia technology should be a hit with smaller ISPs who do not have the resources to purchase separate gear for each communications technology.

According to the Vertical Systems Group market research firm, Fore claimed 16 percent of the carrier and ISP market for ATM in 1996. But that may just be drop in the bucket for Fore with customers such as MCI.

"We believe now that two out of every three packets [on the Internet] crosses [or is switched by] Fore Systems gear," claimed Nelsen.

Cadia's products should be integrated into Fore's hardware and software by the second half of this year, according to company officials. Integration work will include Fore's ForeThought internetworking software package.

Fore bought Nemesys Research, a Cambridge, England-based firm that specializes in products that transmit video over ATM quickly, for approximately $15 million in stock in the first week of December. That acquisition was followed soon after by purchase of Scalable Networks for $35 million in stock. Scalable Networks makes desktop and server software for the Fast Ethernet and emerging Gigabit Ethernet markets.