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Stratus Technologies Receives $115 Million Investment from DB Capital Partners, Compaq and Intel
A Leader in Fault-Tolerant Server Technology also Enters into Industry-Standard Technology Collaboration Agreements with Compaq and IntelLUXEMBOURG, MAYNARD, MA, and NEW YORK, January 10, 2001
Stratus Technologies and its majority shareholder, Investcorp, a global investment company, today announced that DB Capital Partners, Compaq Computer Corporation (NYSE: CPQ), and Intel Capital will make a combined investment of $115 million in Stratus, of which DB Capital will invest $50 million. The transaction is expected to close on February 1, 2001, subject to satisfactory completion of all closing conditions and regulatory approvals.
Also announced today were complementary technology collaboration agreements with Compaq and Intel Corporation. Compaq will work with Stratus to advance the highest levels of availability for industry-standard computing platforms.
"With this investment in Stratus, Compaq will build on its leadership in providing the highest levels of availability to address the needs of customers deploying mission-critical applications in Windows 2000 environments," said Vince Gayman, director, ProLiant High Availability, Compaq Industry Standard Server Group.
Mike Fister, vice president and general manager of Intel's Enterprise Platforms Group, said, "Intel will work with Stratus to help bring enterprise fault-tolerant capability to Intel Architecture-based solutions." Stratus will continue its focus on delivering highly available systems built around Intel processors, including the Intel® Itanium processor and Intel® Pentium® III Xeon processor, and key technologies such as InfiniBand.
"The financial and strategic investments by these international business leaders come at a very opportune time in the evolution of the market," said Stephen C. Kiely, president and CEO of Stratus. "By most accounts, one of the largest and fastest growing segments of our industry is high-availability computing, particularly on industry-standard platforms. Stratus has developed innovative technology and expertise to provide true fault tolerance quickly on cost-effective servers that are simple to deploy, manage and maintain. We believe we are well positioned in the marketplace, perhaps more so than at any other time in our 21-year history."
Stratus Technologies, parent company of the Stratus Group of companies, is a premier supplier of computer systems, services, and technology for mission-critical applications that must not fail, generally known as fault-tolerant computing. Stratus serves the banking, securities, e-commerce, manufacturing, and other industries where the cost of computer-related downtime can be very high.
The investment in Stratus Technologies by DB Capital, Compaq, and Intel Capital will be in the form of a preferred stock purchase. The shares will be acquired from affiliates of Investcorp. Goldman Sachs and Salomon Smith Barney are serving as advisors to both Stratus and Investcorp on this transaction.
At the conclusion of the transaction, Stratus management and Investcorp will retain majority interest and voting control of the company.
Christopher J. Stadler, a member of Investcorp's Management Committee, said, "Our continuing partnership with the management team and employees of Stratus has already exceeded our goals. In less than two years, Stratus has convincingly achieved its strategic objectives and established a strong record as an independent company."
The original company was founded in 1980. Ascend Communications acquired Stratus in 1998 and subsequently sold back the enterprise computing segment of the business to Stratus management and Investcorp in 1999. Now a privately held company, Stratus Technologies is about to commence shipments of the Stratus® ftServer line, the company's own family of Intel Architecture-based servers with 99.999% availability for Microsoft® Windows® 2000 environments. In June 1999, Stratus announced the formation of its 24-7 Technology Division to license its advanced technology to other leading technology companies.
According to Robert G. Sharp, a managing director at DB Capital, "Our investment in Stratus is well aligned with DB Capital's portfolio strategy to invest in high-growth technology companies that have a highly experienced management team, successful operating track record and solid customer traction."
About DB Capital Partners, Inc.
DB Capital Partners is the private equity investment group of Deutsche Bank, with offices in New York and San Francisco. DB Capital targets growth capital investments and buyouts in technology, telecommunications and new media, as well as consumer products and industrial companies. In 2000, DBCP invested $1.5 billion in equity capital globally. Recent technology investments include Paradigm4, Displaytech, Exult, eTime Capital, iLumin Corporation, GlobalSight and PC On Call.
About Intel Capital
Intel Capital, Intel Corporation's strategic investment program, focuses on making equity investments and acquisitions to grow the Internet economy, including Internet infrastructure, content and services in support of Intel's strategic interests. In Europe, Intel Capital invests through Intel Atlantic, Inc., a subsidiary of Intel Corporation. For more information, visit www.intel.com/capital.
Investcorp is a leading global investment group with offices in London, New York and Bahrain. Since 1982, it has completed transactions in North America and Western Europe, with a total acquisition value of approximately $19 billion. In addition to Stratus Technologies, Investcorp and its clients currently have investments in U.S. companies including The William Carter Company, Jostens, Inc., Werner Holdings, TelePacific Communications and Independent Wireless One. U.S. investments that have been taken public by Investcorp include Prime Service, Tiffany & Co., Circle K Corporation, Saks Fifth Avenue and CSK Auto Corporation. In Europe, Investcorp and its clients currently have investments in Avecia (formerly Zeneca Specialties), Gerresheimer Glas, Polestar, Welcome Break, CityReach, and Helly Hansen. Additional information may be found at www.Investcorp.com.
About Stratus Technologies
Stratus Technologies, its subsidiary Stratus Computer DE of Maynard, MA, and its worldwide network of other Stratus companies, offers a proven range of continuously available computer platforms, application solutions, professional services, and technologies for mission-critical business operations. Many Stratus customers are highly visible industry leaders such as prominent U.S. securities firms, major credit card companies, the largest stock exchange in Asia, the largest options exchange in the world, and 15 out of the world's 20 largest banks. The Stratus 24-7 Technologies Division licenses technology for fault tolerance to technology companies. Stratus has offices and a comprehensive network of customer service centers worldwide, and 1,100 employees. For more information, visit www.stratus.com.
Compaq Computer Corporation, a Fortune Global 100 company, is the largest supplier of computing systems in the world. Compaq designs, develops, manufactures, and markets hardware, software, solutions, and services, including industry-leading enterprise computing solutions, fault-tolerant business-critical solutions, and communications products, commercial desktop and portable products, and consumer PCs.
Compaq products and services are sold in more than 200 countries directly to businesses, through a network of authorized Compaq marketing partners, and directly to businesses and consumers through Compaq's e-commerce Web site at http://www.compaq.com. Compaq markets its products and services primarily to customers from the business, home, government, and education sectors. Customer support and information about Compaq and its products and services are available at http://www.compaq.com.