IRE has tentative deal to buy Va. firm

July 06, 1994|By Jay Hancock | Jay Hancock,Sun Staff Writer

Information Resource Engineering Inc., a small White Marsh company that helps banks and other businesses protect electronically transmitted data from hackers and thieves, said it reached a tentative agreement to purchase Connective Strategies Inc., of Chantilly, Va.

Terms of the deal, which hangs on approval of both companies' shareholders and examination of Connective Strategies' books PTC by IRE officials, weren't disclosed.

Buying Connective Strategies would let IRE apply its data-scrambling expertise to a very fast, increasingly popular method of sending computerized information over phone lines, said Anthony Caputo, IRE's chairman.

Most telephone information is sent via modems, which employ nondigital, analog technology to convert computer data into transmittable signals. Connective Strategies' products perform the same task -- except they do it digitally, rendering messages in binary numbers of zeros and ones.

Digital transmission can carry voice and data messages simultaneously. Because it's more than eight times faster than the fastest modem, digital is taking a bigger and bigger share of the market.

Last year analog modems accounted for $666 million in sales; digital equipment that does the same job fetched $86 million, according to International Data Corp., a market research company. By 1997, sales of the digital units will rise to $200 million, the company estimated.

Connective Strategies, which has about 10 employees in Chantilly and several others in a production plant in Sunnyvale, Calif., is one of several small companies making the digital units.

After the planned merger, IRE hopes to add a digital product that carries IRE's scrambling and descrambling technology -- possibly as soon as the end of the year, Mr. Caputo said.

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