NY Times says ASND/SRA boards approved $1B merger on Sunday
nytimes.com
August 3, 1998
Ascend Expected to Acquire Stratus
By LAURA M. HOLSON
Ascend Communications, the Alameda, Calif., maker of
networking equipment, is expected to announce Monday
morning that it will acquire Stratus Computer Inc. for about $1 billion
in stock, a person close to the talks said.
Both boards met and approved the deal Sunday, the person said.
Stratus is a Marlboro, Mass.-based maker of computers designed to
run continuously for customers such as banks and telephone
companies.
Some analysts suggest that Ascend is attracted to Stratus's technology
to allow telephone carriers to offer services like caller ID or call
forwarding over data networks. It is believed that Ascend will spin off
Stratus's nontelecommunications businesses.
Ascend's stock took a pounding on Friday -- down 14 percent for the
day -- when rumors surfaced that the company was interested in
Stratus.
Investors were concerned that any acquisition by Ascend would be
dilutive to its earnings. Last year Ascend struggled with slow demand
and delayed customer purchases.
For months Ascend itself has been rumored to be an acquisition target,
either by Ericsson A.B. or Lucent Technologies.
The company is expected to have sales of $1.4 billion in 1998.
Stratus, for its part, has seen its stock tumble from a high of $60.75 in
September to close at $28.875 on Friday.
The Asian economic crisis has pared business among its customers.
The company lost $10 million in the most recent quarter and saw sales
fall 20 percent.
In July it announced that it would cut 350 jobs, or 15 percent of its
work force, because of a second-quarter loss.
Copyright 1998 The New York Times Company
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