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ADC Picks-Up PairGain for $1.6 Billion

ADC Telecommunications, Inc. Wednesday acquired PairGain Technologies, Inc. for an estimated $1.6 billion in a common stock transaction.

The broadband integration firm intends to utilize the PairGain (PAIR) buy-out as the means to establish ADC (ADCT) as a leading supplier of digital subscriber line systems. The PairGain deal strengthens ADC's DSL market position and also expands its local loop offerings of broadband access systems.

William J. Cadogan, ADC chairman and chief executive officer, said the combination of ADC's and PairGain's DSL products produces a complete broadband package including local loop access, transport and network management.

"Our acquisition of PairGain represents another significant step forward in ADC's mission to enable communications service providers to serve their customers with broadband and bundled Internet data, video and voice services," Cadogan said.

Cadogan added that the PairGain acquisition offers many strategic benefits to ADC.

"It strengthens the position of the combined companies as a leading supplier in the DSL broadband access market," Cadogan said. "It also brings together the finest talent and expertise in the delivery of broadband, multiservice communications over DSL."

Michael Pascoe, PairGain president and chief executive officer, said market forces motivated the companies to merge.

"As a result of market deregulation and competition, the world's incumbent and new competitive communications service providers are seeking innovative approaches to win and retain customers," Pascoe said. "The ADC-PairGain combination joins two companies with a shared vision of helping service providers deploy broadband services."

PairGain is recognized as a leader and innovator of the telecommunications equipment industry. More than 1.7 million PairGain DSL circuits have been installed in over 100 countries throughout the world. Carried by a surge of DSL service deployment in the U.S., the hardware firm's 1999 sales totaled $225 million.

Based in Minneapolis, ADC is a leading global supplier of broadband network equipment, software and integration services for video, voice and data transfer. The firm employs approximately 14,400 people around the world and reported 1999 sales of $2.1 billion.