Stratos Lightwave Acquires Sterling

CHICAGO -- Stratos Lightwave, Inc., (Nasdaq: STLW) a leading supplier of optical subsystems and optical components, today announced it has entered into a definitive agreement to acquire Sterling Holding Company a privately-held company based in Mesa, AZ, that designs and manufactures RF and Microwave interconnect products via its two operating units, Trompeter Electronics and Semflex.

Under the terms of the agreement, Stratos has agreed to acquire Sterling Holding and Sterling will become a wholly owned subsidiary of Stratos. Sterling shareholders will receive approximately 6.1 million shares of Stratos common stock and 50,000 shares of a Series B participating preferred stock. The preferred has a face value of $5.0 million and a contingent value of up to $11.25 million based on certain events and the future performance of Stratos' share price. The transaction is expected to close in Stratos' third fiscal quarter 2004 and is intended to qualify as a tax-free reorganization. The acquisition is subject to approval by both Stratos' and Sterling's shareholders and other customary conditions. Sterling's directors, and a majority of its key shareholders, including Citicorp Venture Capital have agreed to vote in favor of the transaction. Upon closing, Citicorp Venture Capital will own approximately 27% of the combined company. In connection with the transaction Stratos will expand its Board of Directors to nine members. The new board will be comprised of four members from Stratos Lightwave's Board, four members from Sterling's Board, and an additional director chosen by Sterling. Jim McGinley will remain as CEO of Stratos at its Chicago headquarters. CIBC World Markets acted as exclusive financial advisor to Stratos Lightwave in connection with the transaction.

For the calendar year ended December 31, 2002 Sterling generated $39.5 million in revenues, with operating income of $4.9 million, EBITDA of $5.5 million, and net income of $2.7 million. Sterling manufactures and markets high end RF and Microwave interconnect components and assemblies for the Telecommunications, Military/Aerospace, and Television/Broadcast Industries. The company's products include coax, triax, and twinax connectors, cross-connects and cable assemblies. For the twelve months ended December 31, 2002, based on company estimates, approximately 31% of revenue was generated from the Telecom Sector and approximately 44% from the Military/Aerospace Sector, with the balance from other markets.

Jim McGinley, CEO of Stratos remarked, "The acquisition of Sterling and its superior brands in the RF and Microwave markets, Trompeter and Semflex, complement our active and passive optical subsystems business and bolster our presence in attractive growth markets. We expect the combination of Stratos and Sterling to allow the combined company to aggregate its core Optical and RF capabilities to better serve both companies' existing customers and expand their presence in new markets with new customers. Growth in broadband connections in the DSL, Cable Modem, Enterprise, and Military markets is driving greater bandwidth demand in optical and electronic network segments. With the addition of Sterling, Stratos is better positioned to serve the needs of these customers now and in the future. Our intention is to offer customers the right solution, regardless of technology, for their specific application, with the finest customer support and on time delivery. In addition to the new products and technologies that come with the acquisition of Sterling, we welcome the addition of Sterling's management team with their strong culture of profitability."

Due to the upcoming holiday weekend, Stratos will host a live audio webcast and conference call on Monday, July 7th at 5:00 pm EDT. Investors and other interested parties may listen to the live webcast by visiting the investor relations section of the Stratos Lightwave website at www.stratoslightwave.com . A replay of the conference call will be available for 72 hours beginning at 7:00 pm EDT. The replay number is 1-800-642-1687 with a pass code of 1619416. A webcast replay will also be available on the Company's website.

Stratos Lightwave Inc.