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

To: Impristine who wrote (58553)	1/10/1999 9:08:00 PM
From: thebeach	Read Replies (2) \| Respond to of 61433

Bloomberg News on Stratus Sale by: arusin <FONT FACE="arial,helvetica"><SPAN CLASS="story">Ascend to Sell Stratus Computer Unit for $100 Mln to $150 Mln<P>Alameda, California, Jan. 10 (Bloomberg) -- Ascend Communications Inc. agreed to sell the computer business it acquired with Stratus Computer Inc. to an investment group led by Stratus executives for $100 million to $150 million in cash.<P>The No. 4 network-equipment maker, which bought Stratus in October for $822 million, will sell the unit to Investcorp, said Ken Fehrnstrom, Ascend vice president of business development. Ascend also is close to agreements to sell the two software units acquired with Stratus, and the proceeds from all three divestitures will total ''around $150 million,'' Fehrnstrom said.<P>Selling the computer unit, which makes powerful machines used by banks and financial-services firms, will let Ascend focus on the part of Stratus that makes equipment used to direct voice and data traffic on telecommunication networks. ''People were concerned (the other businesses) would distract them from the carrier business,'' said Martin Pyykkonen, an analyst with CIBC Oppenheimer, who rates shares of Alameda, California-based Ascend ''strong buy.''<P>Ascend shares fell 14 percent on July 31, the session before it disclosed the Stratus purchase, and began rising on Aug. 3 only after Ascend said it would sell the units. ''As long as they can get about $150 million for all three, it won't be viewed as a negative'' by investors,'' Pyykkonen said.<P>On Friday, Ascend shares rose 1 3/8 to 71 7/16, their highest level in almost two years.<P>The New Stratus<P>Stephen Kiely, now president of Stratus's enterprise- computer business, will become president and chief executive of the company.<P>Stratus's top management invested a total of $3 million in the venture, or less than 5 percent of total equity in the company, Kiely said in an interview.<P>The remainder was provided by New York-based Investcorp, which said in a statement it has ''substantial'' stakes in 17 companies in North America and Europe, including Saks Inc. and CSK Auto Corp.<P>Investcorp will have four seats on the company's board, while Stratus's managers will have three. Stratus's computer division and related services had about $275 million in revenue in 1998, Kiely said.<P>Stratus will lease its plant in Marlboro, Massachusetts, from Ascend until mid-1999, then move to a new location ''nearby,'' Kiely said. The new Stratus will employ 1,000 workers, he said.<P>Kiely said Stratus's management and Investcorp plan to sell shares in the company to the public at an undetermined date. Stratus customers include 25 of the 30 largest U.S. banks, nine of the 10 largest securities firms and four of the five regional stock exchanges, he said.<P>Ascend and Stratus will maintain their agreement to jointly develop new technology, Fehrnstrom said.</SPAN></FONT>