Ascend Completes Acquisition of Stratus Computer; Launches Carrier Signaling and Management Business Unit.

ALAMEDA, Calif.--(BUSINESS WIRE)--Oct. 20, 1998--Ascend Communications, Inc. (Nasdaq:ASND), a leader in wide area networking (WAN) solutions for providers and users of the public network, announced that Stratus Computer, Inc. shareholders have approved the acquisition of Stratus by Ascend at a special shareholders meeting held yesterday. Under the terms of the agreement each share of Stratus will be exchanged for 0.75 shares of Ascend in a tax-free stock-for-stock exchange. Based on Ascend's closing price on July 31, 1998, the combination will have a transaction value of $33.35 per share, or $822 million in total. The acquisition will be accounted for as a purchase and is expected to be accretive to Ascend's earnings in 1999.

"This acquisition places Ascend at the technological forefront in building the next generation public network infrastructure," said Mory Ejabat, president and chief executive officer of Ascend. "The synergy of Ascend and Stratus technologies, talent, market presence, services and support, creates a formidable new force in the networking industry."

As a result of the acquisition, Ascend has formed a Carrier Signaling and Management business unit, led by Bruce Sachs, former CEO and president of Stratus Computer. "The Carrier Signaling and Management business unit will focus on intelligent network (IN) solutions and related telecommunications applications -- including enhanced services, Internet IN architecture, Home Location Register (HLR), number portability, and associated operating support systems targeted for wireline, PCS, wireless, and voice over Internet (VoIP) carriers," stated Sachs. "In addition, the business unit will continue to develop open, standards-based, fault-tolerant platforms, plus SS7 and related IN infrastructure software. All of these solutions will be fully integrated with Ascend's existing products and solutions."

"MCI Worldcom has been working with both Ascend and Stratus on our integrated SS7/IP architecture for over a year. We are delighted to see the strengths of Stratus and Ascend come together. Stratus, with its trusted SS7 and carrier class reliability model, and Ascend with its innovative, IP and ATM network technologies, will enable the introduction of new services that move us toward an increasingly converged voice, data, and multimedia network," said John Gerdelman, president of Network Services, MCI Worldcom.

"Carriers building a new third-generation infrastructure will need to deliver a superior quality of service and 100 percent reliability which matches or exceeds today's network infrastructure," said Howard Anderson, president and managing director of the Yankee Group. "In light of this requirement, Ascend's acquisition of Stratus is an important step in developing a new architecture that can help build that infrastructure."

As previously announced, in connection with the acquisition Ascend will record a charge of approximately $305 million for in-process Research and Development (R&D). Also, as previously announced approximately 500 positions will be eliminated. These reductions are due to attrition, a reduction-in-force and a group of manufacturing employees moving to a contract manufacturing facility.

As planned, Ascend expects to announce definitive agreements regarding the divestiture of the Stratus non-telecommunications businesses including the Stratus Enterprise Computer business, S2 and TCAM during the fourth quarter of 1998. Ascend is pursuing the option of a Leveraged Buy Out (LBO) of the Stratus Enterprise Computer Division.

About Ascend Communications

Ascend Communications, Inc. (Nasdaq:ASND) develops, manufactures, sells and services wide area networking solutions for telecommunications carriers, Internet service providers and corporate customers worldwide.

For more information about Ascend and its products, please send e-mail to [e-mail]. For Investor Relations, please call our communications hotline at 800/648-3059 or 760/704-4423 (outside the US & Canada). Additional investor information can also be found at: http://www.ascend.com/662.html.

This release, other than historical financial information, contains forward-looking statements that involve risks and uncertainties. The results or events predicted in these statements may differ materially from actual future events or results. For instance, factors which could cause actual events or results to differ from anticipated events or results include the rate of development of new and enhanced technology by Ascend and its competitors, the integration of new businesses, the introduction and market acceptance of new products by Ascend and its competitong statements.

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Note to Editorarks of Ascend Communications, Inc.