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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Sanjay Cherian who wrote (54471)	9/19/1998 4:59:00 PM
From: H.A.M.	Respond to of 61433

Ascend to reveal Stratus software buyer shortly By Duncan Martell SAN FRANCISCO, Sept 18 (Reuters) - Ascend Communications Inc., the No. 5 computer-networking company, said it planned to announce in the next few weeks a buyer for the software business of Stratus Computer Inc., which Ascend agreed to buy last month. Ascend's treasurer, Bernie Schneider, made the comments on Friday to money managers at the NationsBanc Montgomery Securities investment conference in San Francisco. He said the Alameda, Calif.-based company has "several" interested parties for the software business. Ascend said Aug. 3 it would buy the ailing Stratus for about $822 million with an eye on its computers that control key functions at the heart of much of the national phone network. Ascend is focused on selling its networking equipment to telecommunications service providers such as WorldCom Inc. Ascend is on track to close the deal, valued at about $822 million, on Oct. 20. It also plans to sell Stratus' so-called fault-tolerant computer business to a leveraged buyout firm. When Ascend announced the planned purchase, it said it planned to sell off 60 percent of Stratus, which is based in Marlboro, Mass. Stratus computers could act as a link between incompatible circuit-switched voice networks and data networks that communicate on different but more efficient Internet standards. By combining Stratus' SS7 computers that manage calls in the voice network with Ascend's remote-access concentrators and switches -- gear that helps direct and manage information on data networks -- Ascend is banking it can reduce the congestion now found on both data and voice networks. Ascend, the No. 1 networking company Cisco Systems Inc. and 3Com Corp., are racing to sell more equipment to telecommunications companies as voice, data and video are moving to single network rather than separate ones. "A new network infrastructure is going to be required," Schneider said. After the Stratus acquisition closes, Ascend expects 1999 revenue of about $2.3 billion and earnings of about $1.70 a share, Schneider said. Gross margin, or the percentage of revenue left after subtracting product costs, is forecast to be 61 percent to 62 percent. Before Ascend announced its plan to buy Stratus, investors and analysts had speculated it would be a prime takeover target for Lucent Technologies Inc. when it reached the two-year mark of its spin-off from former parent AT&T Corp. For Lucent, the top maker of telecommunications equipment, Ascend would allow it to get into the data networking business, where Lucent's offerings are now weaker than those from rival Cisco and other traditional data networking firms, analysts said. But Ascend said Thursday it planned to stay the course as an independent company. "We're managing the business as a stand-alone entity," Kristina Graziano, Ascend's manager of investor relations, said on Thursday. "We feel very bullish about our prospects." Of course, if an offer were made that made strategic and financial sense, the company has a fiduciary responsibility to bring it to its board for consideration, Graziano said. "We do not feel we need to be acquired to be successful," Graziano said. 14:22 09-18-98