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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): MARCH 30, 1997
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ASCEND COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-23774 94-3092033
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer)
incorporation or organization) Identification No.)
1701 HARBOR BAY PARKWAY 94502
ALAMEDA, CALIFORNIA
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 769-6001
Not applicable.
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On March 30, 1997, Ascend Communications, Inc. ("Ascend") and Cascade
Communications Corp. ("Cascade") announced in a joint press release that they
had signed a definitive merger agreement pursuant to which a wholly-owned
subsidiary of Ascend will merge with and into Cascade. A copy of the press
release is attached hereto as Exhibit 99.1.
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ITEM 7. EXHIBITS.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
Exhibit No. Description
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99.1 Press Release dated March 30, 1997.
2
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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.
Ascend Communications, Inc.
April 8, 1997 By: /s/ MICHAEL J. JOHNSON
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Michael J. Johnson,
Controller and
Chief Accounting Officer
3
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press Release dated March 30, 1997.
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[ASCEND LETTERHEAD]
PRESS RELEASE
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<S> <C> <C>
Contacts:
Bob Dahl Paula Cook Bernie Schneider
Chief Financial Officer Director, Investor Relations V.P., Strategic Business Development
510-747-2309 510-747-2345 510-337-2618
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ASCEND COMMUNICATIONS, INC. TO ACQUIRE
CASCADE COMMUNICATIONS CORP.
ALAMEDA, CA - March 30, 1997 - Ascend Communications, Inc. (NASDAQ: ASND) and
Cascade Communications Corp. (NASDAQ: CSCC) today announced a definitive
agreement under which Ascend will acquire Cascade in one of the largest mergers
in the history of the networking industry. Upon closing, the company will
retain the Ascend name and will be headquartered in Alameda, California.
"Ascend and Cascade share a common vision of an emerging network infrastructure
that delivers end-to-end networking solutions to a broad base of customers. To
deliver these solutions requires best-of-breed technology in four key areas:
Access Switching and Concentration, IP Switching, Backbone Switching, and Remote
Products," said Mory Ejabat, Ascend's president and chief executive officer.
"The combination of the products, technologies and sales channels of both
companies, with the leadership each company has in the different market
segments, will position the new Ascend as one of the networking industry's
premier providers of end-to-end networking solutions for carriers, ISPs, network
service providers and small and large businesses," Mr. Ejabat continued.
Under the terms of the agreement, each share of Cascade common stock will be
exchanged for 0.7 of a share of Ascend common stock. Outstanding options to
purchase Cascade stock will be converted at the exchange ratio into Ascend
options. The transaction is intended to be accounted for as a pooling of
interests and to qualify as a tax-free reorganization. Based on the closing
price of Ascend common stock on March 27, 1997, the deal is valued at
approximately $3.7 billion. Ascend shareholders will own approximately 65% and
Cascade shareholders will own approximately 35% of the combined company's
shares. The transaction is subject to various customary conditions, including
clearance under the Hart-Scott-Rodino Antitrust Improvements Act and approval by
Ascend and Cascade shareholders. The company expects to recognize a one-time
charge related to certain merger costs and related expenses in the third quarter
when the deal is expected to close.
In connection with the transaction, each company granted the other an option,
exercisable under certain conditions, to purchase shares equal to approximately
19.9% of the other company's outstanding shares.
"The integration of the combined company's products will expand upon the carrier
class solutions offered from the edge of the network through the core, providing
true end-to-end quality of service," said Dan Smith, president and chief
executive officer of Cascade. "By providing an integrated set of products, we
will, for the first time, allow network service providers to quickly and cost
effectively deploy, provision and
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deliver network services which will support the evolving needs of their customer
base. Delivery of this new networking paradigm through Ascend's strong
international presence will be added advantage to the already compelling story
behind combination of the two companies."
Mory Ejabat will remain as Ascend's president and chief executive officer, and
Bob Dahl will continue to serve as chief financial officer of the combined
company. Once the transaction is completed, Ascend will organize into four
business units: Multimedia Access Products, Remote Products, Access and
Concentrator Products, and Core Switching Systems. Dan Smith will join the
company as executive vice president and general manager of the Core Switching
Systems unit, which will have responsibility for all ATM, frame relay and IP
switching products, including Ascend's family of GRF IP switches. Gururaj
"Desh" Deshpande will join Ascend as executive vice president, responsible for
strategic planning. Both Dan and Desh will be joining Ascend's Board of
Directors, as will Paul Ferri, currently a member of Cascade's Board of
Directors, bringing the total number of board members to ten.
Separately, Cascade Communications Corp. has announced today (See Cascade press
release) that it is pre-releasing an estimate of expected first quarter
operating results, which reflect estimated revenue for the first quarter of 1997
of $90 million, versus $56 million for the same period in 1996.
Ascend Communications, Inc. and Cascade Communications Corp. will separately
announce final results for the first quarter in April 10, 1997.
Deutsche Morgan Grenfell acted as financial advisor to Ascend Communications in
this transaction and Morgan Stanley & Co. acted as financial advisor to Cascade
Communications.
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 Cascade Communications Corp., and the success of the
proposed merger 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, risks or
entering new markets, competitive response, and a downturn in the networking
industry. For a more detailed description of the risk factors associated with
Ascend Communications, Inc. and Cascade Communications Corp. please refer to the
companies' respective SEC filings.
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/multimedial access. For
more information about Ascend and its products, please visit the Company's web
site at http://www.ascend.com, or e-mail [email protected].
Cascade Communications Corp. is at the forefront of broadband data
communications with its family of scaleable, carrier class Frame Relay, ATM and
IP switching products. Used by public carriers and Internet service providers
worldwide, Cascade products are forming the foundation of the public network
infrastructure for global communications. Cascade is headquartered in Westford,
Massachusetts, USA, with offices throughout the Americas, Europe and
Asia/Pacific. For more information about Cascade and its products please visit
the Company's web site at http://www.casc.com.
