Valuation of 35.5 million Euros; acquisition to enhance wireless capabilities and establish global Centre of Excellence for hardware and mechanical design in Finland | |
| New Delhi (India) and Kaustinen (Finland) July 26, 2006: Sasken Communication Technologies Ltd (Sasken), a pioneer in the telecom R&D and support space, today announced the 100% acquisition of Finland based Botnia Hightech Oy (Botnia), a leading provider of wireless R&D and testing services. Sasken will pay € 35.5 million (Euros Thirty Five point five million) for Botnia in an all cash deal. |
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| Based at Kaustinen, Finland, Botnia Hightech is an important supplier of Hardware, Software, Mechanical Design and Testing Services to leading mobile handset vendors. Botnia's services can be applied in R&D projects, subprojects, tester design, as well as in cost reduction. They also offer tailor-made turnkey solutions. Botnia Hightech Oy's main operations are in Finland with additional operations in Denmark and Germany. For the year ended April 30, 2006, Botnia reported revenues of € 17.7 million with a Profit After Tax of € 2.9 million. |
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| Sasken has been a leader in providing R & D and support outsourcing services to companies across the communications value chain. This acquisition is expected to help Sasken scale its offering portfolio faster. Sasken has been focusing on a strategy of deepening relationships with Tier 1 customers and Botnia's customer base will further complement the same. The acquisition also gives Sasken a presence in Finland, which will add to its global development centers in Mexico and China, apart from its centers in multiple locations in India. |
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| Rajiv Mody, Chairman of the Board and Chief Executive Officer, Sasken said, "We are tremendously excited by the opportunities that this deal opens up for both Sasken and Botnia. Europe leads the world in the development of wireless technology. Botnia's European presence and their expertise combined with Sasken's global reach and India based development centers will enable us to offer a compelling portfolio of value added solutions to our customers across the globe." |
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| "Botnia Hightech Oy has established itself as a successful high-tech company that is a household name in Finland. In Sasken, we have found an ideal partner to build on this strong foundation and become a global leader in the wireless communication space. We expect growth in our Finland business, as well as to gain the ability to serve global customers through this partnership. The cultural affinity between our two organizations will be the key factor in the success of our joint endeavors," says Matti Paasila, Chairman of the Board of Botnia. |
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| The definitive agreement has been signed between the two companies, and integration planning will start immediately. A joint team has been identified to work on various aspects of the integration process. The integration process will start immediately after the closing day. The integration will be a significant exercise considering the cross-cultural and global nature of the process involved. The top management of both companies has reiterated their commitment and focus on executing this exercise seamlessly. |
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| Deal Highlights |
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| Financial |
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| "� Valuation - € 35.5 million |
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| "� All cash deal |
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| "� Botnia Revenues FY 06 - € 17.7 million; PAT "� 16.3% |
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| "� 230 employees as on April 30, 2006 |
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| "� Closing expected in Q2 |
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| Rationale |
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| "� Expertise in Wireless Technology |
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| "� Competencies added on to Sasken's portfolio "� RF, Hardware Design, Mechanical Design |
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| "� Scale and Global reach to help Botnia's growth plans; growth in Botnia's Finland biz as well |
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| Operational |
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| "� Finland Development Center to be Global Center of Excellence for Hardware and |
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| Mechanical Design |
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| "� The Finland Team will report into the COO, Sasken |
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| Integration |
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| "� Integration plan and dedicated team in place; efforts to begin immediately after closing Day |
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| About Sasken (www.sasken.com): |
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| Sasken is a global provider of software and support services for the communications industry. Sasken works with Network OEMs, semiconductor vendors, Terminal Devices OEMs and Operators across the world. Global Fortune 500, Tier 1 companies in each of these segments are Sasken's customers. Established in 1989, Sasken employs over 2,800 people at its offices in India, China, Germany, Japan, Mexico, Sweden, UK and the U.S. Sasken is listed in the Bombay Stock Exchange and National Stock Exchange in India. Sasken has consistently been rated among the Best Employers in India by all leading industry surveys. |
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| About Botnia Hightech (www.bothi.fi): |
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| Botnia Hightech is a globally operating wireless technology company. The core business areas are hardware, software and mechanical design and testing related to these areas. The company improves the competitiveness of the customers by accelerating their R&D and testing processes to achieve leading products. |
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| For further information, please contact: |
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| India |
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| Venkatesh S |
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| Sasken Communication Technologies Ltd |
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| Tel: +91 80 56944817 |
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| Mobile: +91 98457 19332 |
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| E-Mail: pr@sasken.com |
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| www.sasken.com |
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| Finland |
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| Hannu Timmerbacka |
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| Botnia Hightech Oy |
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| Tel: +358 424 12121 |
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| Fax : +358 6 861 2370 |
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| Email : hannu.timmerbacka@bothi.fi |
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| www.bothi.fi |
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| Disclaimer |
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| Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements due to risks or uncertainties associated with our expectations with respect to, but not limited to, our ability to successfully implement our strategy and our growth and expansion plans, technological changes, our exposure to market risks, general economic and political conditions in India which have an impact on our business activities or investments, changes in the laws and regulations that apply to the Indian IT services industry, including with respect to tax incentives and export benefits, adverse changes in foreign laws, including those relating to outsourcing and immigration, increasing competition in and the conditions of the Indian and global IT services industry, the prices we are able to obtain for our services, wage levels in India for IT professionals, the loss of significant customers the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic and foreign laws, regulations and taxes and changes in competition in the information technology/telecommunication industries. Additional risks that could affect our future operating results are more fully described in our Red herring filing. The company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company. |
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