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Sybase aims to extend mobile capabilities

Company plans to add to its "unwired enterprise" initiative with the purchase of middleware provider Extended Systems.

Sybase has agreed to purchase mobile middleware provider Extended Systems in a cash deal worth roughly $71.3 million, the companies said Friday.

Sybase labeled the buyout of Extended as yet another step in its move into the mobile computing arena, where it has made several acquisitions during the last two years. Sybase said that it will add Extended's technology, which includes products that provide access to collaboration tools from mobile devices, to its iAnywhere Solutions unit, which makes embedded database software for wireless gadgets.

Both Sybase and Extended also make development tools for building mobile applications.

Sybase executives said the Extended deal, which is expected to close during the fourth quarter, expands the company's product portfolio and its geographic reach. Though it's based in Boise, Idaho, many of Extended's 2,500 customers are in Europe. Extended has 180 employees.

Extended's technology will fold into Sybase's "unwired enterprise" initiative, which is focused on building software that companies use to let employees wirelessly access corporate networks. The deal echoes Sybase's $95 million buyout last year of data management applications maker XcelleNet, which also significantly added to the company's roster of mobile products and customers.

"This acquisition will position Sybase with a powerful, end-to-end information mobility offering that, when combined with our mobile database and mobile device management products, will enable Sybase to deliver on the benefits of the unwired enterprise," Sybase Chief Executive John Chen said in a statement.

Industry watchers said the deal makes sense for Sybase in terms of growing its product and customer base. Stephen Drake, an analyst with Framingham, Mass.-based IDC, said that the two companies appear to be well-matched for the marriage. Drake said that Extended has already established itself as a top 5 vendor of mobile middleware worldwide, which should lend greater experience and credibility to Sybase in the sector.

"This deal speaks to what's happening in the market in terms of consolidation, and it gives Sybase another strength point in Europe, which is an important part of this market," Drake said. "It also buys Sybase some market share, and it helps shore up their e-mail play. Extended has been working on that business for a while."

The analyst said that Sybase appears to have a solid plan for building out its mobile business and indicated that the buyout should serve the company well moving forward.

"They've filled some good holes with complimentary pieces that have added technology and customers," he said. "Extended is a known player, so in that sense this deal is significant to expanding Sybase's mobile efforts."

The Sybase acquisition marks the second time that Extended has agreed to a buyout. Handheld maker Palm saw its 2001 deal for the software maker collapse after a steep drop in Palm's share price led both sides to call off the transaction.