Communications and networking equipment vendor Ascend Communications is reportedly very close to making an offer to buy high-end computer manufacturer Stratus Computer.
Reports have been circulating since the middle of last week that a deal is in the offing between the two companies.
According to reports, the deal is valued in the vicinity of $US800 million. Both vendors reported their second quarter results for fiscal 1998 last month. Ascend reported net income of $US59.1 million for the period ending June 30, 1998, up 12.8 per cent on the previous quarter, with net sales of $US327.4 million, a rise of 7.3 per cent on Q1 fiscal 1998. Meanwhile, Stratus announced a loss of $US10 million for its second quarter of fiscal 1998, with revenues down to $US134.3 million from $US167.6 million in the same quarter a year ago.
Industry analysts are largely mystified by the deal since the companies operate in rather different marketplaces - Ascend catering for telecom carriers and ISPs with its remote access and WAN equipment, while Stratus provides fault-tolerant computers and related software.
However, the two companies are converging on the telecommunications arena, with more Stratus computers being used increasingly by telcos to run their Signaling System 7 (SS7) signalling protocol software which lies at the core of the voice network, according to the Wall Street Journal.
Rumors also continue to proliferate that Lucent Technologies will eventually acquire Ascend.