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Ascend reportedly very close to buying Stratus

Ascend reportedly very close to buying Stratus

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.


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