TranSwitch Corporation to acquire Onex Communications Corporation

Aug. 21, 2001--TranSwitch Corporation announced an agreement to acquire Onex Communications Corporation, which specializes in the development of integrated circuits that enable switching, routing and transmission of multiple types of voice and data traffic.

TranSwitch Corporation (NASDAQ:TXCC) announced it has signed a definitive agreement to acquire privately held Onex Communications Corporation ("Onex"), which specializes in the development of integrated circuits that enable switching, routing and transmission of multiple types of voice and data traffic. Onex's System Silicon solution is able to aggregate, groom, switch and provision legacy TDM and next generation voice and data traffic over metropolitan access and transmission networks.

The transaction has a total value of approximately $89 million. The consideration for the non-TranSwitch interest in Onex will consist of $20 million in cash and approximately 6 million shares of TranSwitch common stock, currently valued at approximately $55 million. The transaction is expected to be completed in the third quarter ending September 30, 2001, subject to customary closing conditions and requisite regulatory approvals.

The transaction, which will be accounted for as a purchase, is expected to be dilutive to TranSwitch's earnings per share on a pro-forma basis by approximately $0.03-$0.05 per share in the fourth quarter of 2001. Onex, based in Bedford, Massachusetts, will operate as a wholly owned subsidiary of TranSwitch.

Onex was founded with TranSwitch technology, and TranSwitch was an original investor in Onex. Other investors include IBM, St. Paul Ventures, Signal Lake Venture Fund, Star Ventures, TSF Entrepreneurial Roundtable, and Venrock Associates. TranSwitch has additionally incubated and partnered with several start-ups with promising technology. These partnerships are designed to give TranSwitch access to products and technologies that are complementary to TranSwitch's own product portfolio. TranSwitch will continue to evaluate acquisitions of strong entrepreneurial companies that will extend the depth and the breadth of its product line, intellectual property portfolio and market opportunities.

"With this acquisition, TranSwitch will be able to offer a complete range of products and solutions targeted towards the metropolitan access market, which is estimated to grow in size to exceed $7 billion in system sales by 2005," stated Dr. Santanu Das, President and Chairman of the Board of Directors of TranSwitch Corporation.

Onex's high-speed switching, routing, and grooming technology will seamlessly integrate into the TranSwitch product line. The combined product portfolio will further enable development of cost effective system architectures that address both service flexibility and increased bandwidth requirements of the next generation networks.

About TranSwitch Corporation:

TranSwitch Corporation, headquartered in Shelton, Connecticut, is a developer and global supplier of high-speed VLSI semiconductor solutions to original equipment manufacturers who serve three fast-growing end-markets: the Worldwide Public Network Infrastructure, the Internet Infrastructure, and corporate Wide Area Networks (WANs). For more information, visit www.transwitch.com.

About Onex Communications Corporation:

Onex, a semiconductor company, is focused on communications solutions that exploit fundamental shifts in broadband traffic.

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