U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MAY 30, 1996
NETSTAR, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 0-26492 41-1714009
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
10250 VALLEY VIEW ROAD, SUITE 113
EDEN PRAIRIE, MINNESOTA 55344
(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (612) 943-8990
NOT APPLICABLE
(Former name or former address, if changed since last report.)
(The remainder of this page was intentionally left blank.)
ITEM 5. OTHER EVENTS.
On May 30, 1996, NetStar, Inc. ("NetStar"), Ascend Communications, Inc.
("Ascend"), and Nebula Acquisition Corporation (a wholly-owned subsidiary of
Ascend) ("Nebula") entered into an Agreement and Plan of Merger (the
"Agreement"). Under the Agreement, each share of common stock of NetStar, other
than shares beneficially owned by Ascend, Nebula or any other wholly-owned
subsidiary of Ascend, will be converted into .35398 of a share of common stock
of Ascend. Outstanding options and warrants to acquire NetStar common stock will
be converted into Ascend options and warrants, respectively, and an outstanding
option or warrant to acquire one share of NetStar common stock will become an
option or warrant to acquire .35398 of a share of Ascend common stock. The
Agreement has been approved by the respective Boards of Directors of NetStar and
Ascend, and it is subject to the approval of NetStar's shareholders, the receipt
of various governmental approvals and other customary closing conditions. The
acquisition pursuant to the Agreement will be accounted for as a pooling of
interests and is intended to qualify as a tax-free reorganization.
This Current Report on Form 8-K contains forward-looking statements
that involve risks and uncertainties. Actual results may differ from the results
discussed in the forward-looking statements due to many factors including,
without limitation, unanticipated delays in obtaining regulatory approvals or
the approval of the NetStar shareholders.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(A) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Not applicable.
(B) PRO FORMA FINANCIAL INFORMATION.
Not applicable.
(C) EXHIBITS.
Exhibit 99.1 Joint Press Release of NetStar and Ascend dated
May 31, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NetStar, Inc.
Date: June 4, 1996. By /s/ Wayne A. Zuehlke
Wayne A. Zuehlke
Vice President, Treasurer and Controller
Exhibit 99.1
[LOGO FOR ASCEND] [NETSTAR LOGO]
Press Release
Contact: Ascend Communications, Inc. NetStar, Inc.
Bob Dahl Douglas Pihl
Chief Financial Officer President and CEO
510-769-6001 x: 2309 612-996-6934
Paula Cook Duane S. Carlson
Director, Investor Relations CFO and Executive VP
510-769-6001 x: 2345 612-996-6935
ASCEND COMMUNICATIONS, INC. TO ACQUIRE NETSTAR, INC.
ALAMEDA, CA -- May 31, 1996 -- Ascend Communications, Inc. (NASDAQ: ASND) and
NetStar, Inc. (NASDAQ: NTSR) today announced an agreement under which Ascend
will acquire NetStar in a transaction to be accounted for as a pooling of
interests. NetStar, based in Eden Prairie, Minnesota, is a developer of high
performance, high speed Internet Protocol (IP) network routers capable of
routing over 2.5 million packets per second over a 16 gigabit non-blocking
cross-bar switch which connects any combination of high speed data interfaces,
including ATM (OC-3, OC-12), FDDI, Frame Relay, HIPPI or Fast Ethernet.
NetStar's technology, which combines the performance and scalability of
switching with the intelligence and manageability of IP routing, integrated with
Ascend's wide area networking and bandwidth on demand technologies will provide
the next generation of IP switching products, which will be capable of switching
IP traffic over any available medium.
Integration of the technologies from Ascend and NetStar will provide the
industry's only single-platform IP switching product suitable for
medium-to-large sized ISPs or carrier POPs, as well as the backbone of the
Internet.
Today, the Internet backbone and carriers' data networks are designed using
conventional routers, which are limited in performance to approximately 500,000
packets per second. As the number of dial-up users increases and corporations
increasingly use T1 or T3 lines to access the Internet and on-line services,
routers are becoming the bottleneck in the networks, causing delays and
blackouts. IP switches, which will be able to route over 2.5 million packets per
second, can be used to improve the performance of the networks, reducing delays
and preventing blackouts.
Commenting on the acquisition, Mory Ejabat, president and chief executive
officer of Ascend, said, "We are very pleased that NetStar has decided to join
forces with us. We believe the combination of their IP switching product and
Ascend's MAX family of access switches and Pipeline access routers will provide
a complete networking solution for ISPs, on-line service providers and carriers.
The NetStar product and technology is a natural fit for Ascend's marketing and
sales channels. This acquisition will enhance Ascend's leadership in the
Internet, on-line service and carrier infrastructure."
Also commenting on the acquisition, Douglas Pihl, president and chief executive
officer of NetStar, said "Ascend is the ideal partner for NetStar, with a very
complementary product line and strong distribution for our high capacity routing
products. We are very pleased to be joining the Ascend team."
The operations of NetStar will remain in Eden Prairie, Minnesota, operating as
the Ascend High Speed Networking Business Unit. Douglas Pihl, president and
chief executive officer of NetStar, will join Ascend as vice president and
general manager of the new business unit.
Under the terms of the agreement, NetStar stockholders will receive .35398
shares of Ascend common stock for each share of NetStar. Outstanding options and
warrants to purchase NetStar common stock will be converted to Ascend options
and warrants, respectively. The transaction will be accounted for as a pooling
of interests and is intended to qualify as a tax-free reorganization.
The closing price of Ascend on May 30, 1996 was $66.125 per share, giving the
transaction an approximate value of $300 million. The transaction is expected to
be completed by the end of August 1996 and is subject to NetStar shareholder
approval the receipt of various governmental approvals and other customary
closing conditions. The transaction is expected to be slightly dilutive for
Ascend in 1996 and is expected to be accretive in 1997.
This press release contains forward-looking statements that involve risks and
uncertainties. Actual results, including the level of earnings of both Ascend
Communications, Inc. and NetStar, Inc., may differ from the results discussed in
the forward-looking statements. Factors that might cause such a difference
include, but are not limited to, risks associated with acquisitions, such as
difficulties in the assimilation of operations, technologies and products of the
acquired companies, diversion of management's attention from other business
concerns and risks of entering new markets.
Ascend Communications, Inc. is a leading, worldwide provider of remote
networking solutions for corporate central sites, ISP POPs, remote offices,
mobile workers and telecommuters. Ascend develops, manufactures, markets, sells
and supports products which utilize bandwidth on demand to extend existing
corporate networks for applications such as remote LAN access, Internet access,
telecommuting, SOHO connectivity and videoconferencing/ multimedia access.
NetStar, Inc. creates and markets advanced technology products that satisfy
customers' highest capacity internetworking requirements. Its internetworking
products combine high-speed switching, Internet standard communications and
router protocols.
Ascend Communications, Inc. and NetStar, Inc. will be holding a conference call
to discuss this acquisition. The conference call will be held at 6:00am PDT
(9:OOam EDT) on Friday, May 31, 1996. To participate, call 1-800-611-1148
(612-288-0337 International), and ask for the Ascend Communications/NetStar
Conference Call. A playback of this conference call will also be available
beginning at 9:30am PDT. To listen to the playback, call 1-800-475-6701 (612-
365-3844 International) and enter the reservation number 307119.
