Stratus receives $115 million investment

Deutsche Bank (DB) Capital Partners, Compaq and Intel invest in Stratus Technologies` fault tolerant hardware and industry-standard technology collaboration agreements are entered into

In conjunction with its majority shareholder, Investcorp, a global investment company, Pretoria-based Stratus Computer Systems today announced that DB Capital Partners, Compaq Computer Corporation 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.

Says Danny de Beer, managing director of Stratus Computer Systems South Africa, "This is an endorsement of the Stratus 24 x 7 fault tolerant technology by the worlds leading technology and investment banking companies. Existing and new customers are excited and enthusiastic about this technology`s cost effectiveness because it is transparent and delivers on the promise of continuous availability. Moreover, the transparency of the technology also ensures that no specialist skills are needed to maintain the hardware as it supports Windows 2000 and that is becoming an increasingly important factor with the South African IT industry looking a dire skills shortage directly in the eye. This technology does not require the specialist skills needed to maintain cluster solutions."

"With this investment in Stratus, Compaq will build on our leadership in providing the highest levels of availability to address the needs of customers deploying mission-critical applications in Windows 2000 environments," says Vince Gayman, director, ProLiant High Availability, Compaq Industry Standard Server Group.

Mike Fister, vice president and general manager of Intel`s Enterprise Platforms Group, comments, "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," says 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, says, "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 100 percent availability for Microsoft Windows 2000 environments. In June 1999, Stratus announced the formation of its 24 x 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."