NEW YORK-Cellnet Data Systems Inc., which provides wireless monitoring networks to utilities, was expected to go public late last week or early this week.
The planned initial public offering of 5 million shares of common stock is lead managed by Morgan Stanley & Co., New York. A share price in the range of $19 to $20 is expected, according to the preliminary prospectus. Cellnet Data will be listed on Nasdaq.
After the closing of its stock offering, Cellnet anticipates raising additional capital through two private placements in which two electric utilities will buy a total of $25 million in Cellnet common stock. Northern States Power Co. in Minneapolis will buy $15 million and Union Electric Development Corp., a wholly owned subsidiary of Union Electric Co. in St. Louis, will purchase $10 million.
Cellnet Data Systems, headquartered in San Carlos, Calif., is in the process of building wireless network meter reading (NMR) systems covering 1.22 million meters for Union Electric and Kansas City Power & Light Co. Cellnet also has contracted to build NMR to provide services covering 1.015 million meters for Northern States Power and Puget Sound Power & Light Co. in Washington state.
Cellnet is targeting utilities operating in the 60 largest metropolitan statistical areas, which contain the majority of the 225 million electric, gas and water meters in the United States.
“Cellnet’s proprietary technology enables (it) to make extremely efficient use of spectrum; as a result, relative to other wireless services, the company has been able to acquire frequency at a very low cost,” said the preliminary offering statement. “The company has capitalized $762,000 for license fees and related expenses as of June 30, and has acquired 50 spectrum licenses in 42 of the top 60 MSAs.”
Cellnet designs, builds, owns and operates wireless networks capable of providing low-cost, real-time status and event monitoring of up to several million fixed end points, the company’s disclosure document said.
Besides tapping American utilities, which are under increased competitive pressures due to deregulation, Cellnet also has set its sights on overseas joint ventures in this industry. It is looking into projects in Singapore, Thailand and the United Kingdom. Cellnet also is exploring other applications for its remote monitoring services.
“Potential non-utility applications of the company’s systems include home security, remote control of traffic lights and remote status monitoring of vending machines, office equipment, parking meters and other equipment,” the red herring said.
To develop these applications, Cellnet said it is working with companies including Ameritech Corp., Hewlett-Packard Co., Honeywell Inc., Real Time Data Inc. and Interactive Technologies Inc.
