Tuesday February 23, 6:58 am Eastern Time
Company Press Release
Ascend Announces Divestiture of S2
Systems, the Final Non-Telecom
Business Unit of Former Stratus Computer, Inc.
Ascend's Divestiture Strategy Raises the Bar for Successful Technology
Acquisitions
ALAMEDA, Calif.--(BUSINESS WIRE)--Feb. 23, 1999-- Ascend Communications, Inc.
(Nasdaq:ASND - news), a leader in wide-area networking (WAN) and Intelligent Network (IN)
solutions for providers and users of the next generation public network, today announced the sale of
S2 Systems, the last non-telecom business unit of the former Stratus Computer, Inc.
S2 Systems, a provider of electronic commerce software systems and professional services, will be
sold to an affiliate of Baker Capital Corp., a private equity management firm.
After acquiring Stratus on Oct. 19, 1998, Ascend committed to divesting Stratus' four non-telecom
business units, S2, TCAM, Astria and the Enterprise Computer unit, in order to focus its efforts on
the convergence of voice and data networks. The sale of S2 marks the final chapter in what many
have viewed to be one of the most astute and successful corporate acquisitions within the technology
industry.
''Our acquisition of Stratus and immediate divestiture of the non-telecom business units has set the
standard for a textbook acquisition strategy,'' said Ken Fehrnstrom, senior vice president of business
development for Ascend.
''Equally important to our strategy was determining how to successfully divest the non-telecom
business units, while creating additional value for all parties involved. Once the decision to acquire
Stratus was made, we knew the remaining non-telecom assets would have a renewed value to each
of their respective market segments.''
Ascend took the following actions in selling Stratus' non-telecom business units:
-- Jan. 11, 1999 -- Ascend announced a definitive agreement
regarding the divestiture of the Enterprise Computer Division of
Stratus Computer, Inc. to Investcorp, a global investment group.
-- Jan. 19, 1999 -- Ascend sold its 50 percent interest in the
former Stratus Computer, Inc.'s financial software joint venture
(Astria) to French based Atos, a leading European information
technology services provider.
-- Feb. 8, 1999 -- Ascend announced a definitive agreement to sell
TCAM Systems, which develops and markets software for the global
securities and financial exchange industries, to Swedish-based OM
Technology.
''Clearly, Ascend has proven itself to be a market leader, in not only technology, but growth strategy
and business development as well,'' said Paul Johnson at BancBoston Robertson Stephens.
''Ascend saw an opportunity to acquire a company with innovative, market-driving technology
which would enhance Ascend's core product offerings. They were able to concurrently divest the
non-telecom assets for a financial gain, demonstrating a creative solution that benefited both
customers and employees.''
Ascend's acquisition of Stratus' telecom technology equips Ascend with SS7 software and
technology, as well as fault-tolerant computing platforms that enable the integration of voice and data
networks.
Ascend's solutions based on these technologies enable network service providers to implement
cost-effective, reliable and transparent means of relieving network congestion while reducing
operating costs on the public switched telephone network (PSTN).
Since the acquisition of Stratus, Ascend has shipped the Ascend SS7 Gateway (ASG), the first
commercially available, standards-based SS7 gateway product that relieves congestion on the
PSTN.
By transparently routing calls between voice and data networks, this breakthrough solution will end
Internet busy signals, cut the cost of providing dial-up connections, and free-up PSTN circuits to
carry voice traffic.
This exemplifies Ascend's commitment to delivering best-in-class, enhanced service solutions, along
with their ability to meet the needs of customers worldwide.
About Baker Capital Corp.
Baker Capital Corp. manages one of the country's largest private equity funds focused exclusively on
communications industry investments. It targets controlling and significant minority equity positions in
companies that provide communications software, equipment, services, and applications.
Investors in the fund include prominent insurance companies, university endowments and
foundations, public and private pension funds, financial institutions, and families. |
