Deal-hungry giants byte into home-grown firms.

• Position: High-technology firms - Industry Overview

It may not be Silicon Valley, but North Carolina is a hot bed of high-tech innovation. And in 1995, its maturing software industry drew national notice.

In fact, out-of-state suitors found five Triangle companies ripe for picking. Beame & Whiteside Software, Ventana Communications, Burl Software, Creative Interaction Technologies and Integrated Silicon Systems were gobbled up at a pretty price.

"I've been here 10 years, and what I've seen in terms of maturing level is pretty amazing," says Monica Doss, executive director of Durham-based Council for Entrepreneurial Development. "Until you see [all the transactions] laid out together, you don't realize how much activity is going on here."

The biggest deal was for Durham-based Integrated Silicon Systems, maker of software for advanced integrated circuits. The 10-year-old company, which went public in 1994, posted sales of only $9 million in the first half of 1995. Yet it commanded an estimated $284 million in stock from California-based software maker ArcSys Inc.

"Bigger software companies are looking to consolidate, and they're putting good numbers down," explains Fred Hutchison, a Raleigh-based partner in the law firm Petree Stockton, which handled the ISS and CI Technologies deals. "It's almost like, 'Tell me what you want,' and you give this outlandish number. And they take it."

Betsy Justus, director of the North Carolina Electronics & Information Technologies Association in Raleigh, says fast-growing Tar Heel software makers like Raleigh-based Medic Computer Systems "are indicators to the technology community outside the state that we are a growing bed of development." Medic - which develops computer systems for the healthcare sector - saw its stock jump 138% from October 1994 to October 1995.

In 1994, North Carolina's software, electronics and telecommunications industries employed a combined 146,000, Justus says. By October 1995, the software industry alone employed 175,000.

Despite those signs of maturing, 1995 saw a dearth of high-tech IPOs. As of late November, only Cary-based Seer Technologies had gone public, though Raleigh-based Cardiovascular Diagnostics Inc. was planning a $25 million offering by year end. Seer raised $48 million in its June offering. But Hutchison says, "I can think of four of our [high-tech] clients that are seriously considering IPOs for 1996."

Two-year-old NetEdge Systems Inc. had no trouble raising $11 million in venture capital in August. The RTP-based...