Elektrobit Group Oyj - ELEKTROBIT ACQUIRES MAJORITY IN AUTOMOTIVE ELECTRONICS SOFTWARE COMPANY - 3SOFT GMBH
March 08, 2004
ELEKTROBIT ACQUIRES MAJORITY IN AUTOMOTIVE ELECTRONICS SOFTWARE COMPANY - 3SOFT GMBH
The purchase price for the 3SOFT GmbH shares shall be paid by issuing 8,421,951 new Elektrobit Group Plc. shares and in addition by paying 9,066,667.07 euro in cash at closing today. As a result of the acquisition Elektrobit Group Plc. will own approximately 80 percent of the shares and votes in 3SOFT GmbH while the remaining 20 per cent of the shares shall continue to be owned by the two managing directors of 3SOFT GmbH. The shares received by Elektrobit Group Plc. in connection with the acquisition will be recorded at current value in the accounts.
In 2003 net sales of 3SOFT GmbH amounted to 15.5 million euro, the operating profit to approximately 1.1 million euro and the net profit to approximately 0.6 million euro. During the years 1998-2003 the average increase of 3SOFT GmbH's net sales has been approximately 25 per cent. In 2004 the increase of 3SOFT GmbH's net sales is expected to be slightly more moderate than the average increase during the previous years. 3SOFT will be reported as part of the Elektrobit Group's Contract R&D Business Unit. The acquisition is not estimated to have any significant effect on the Elektrobit Group's operating profit level during 2004.
The Elektrobit Group seeks to grow faster than the telecommunications industry in average by, among other things, expanding its customer base in telecommunications and other industries and by strengthening the company through strategic alliances and M&A's. The acquisition is in line with the Elektrobit Group's strategic objectives.
"The share of electronics and software in cars continues to grow and this offers a growing market for productization solutions based on embedded software, wireless and other technologies of 3SOFT and the Elektrobit Group. By joining the forces, several levels of business synergies are targeted", says Juha Sipilä, CEO of Elektrobit Group Plc.
"The customers of 3SOFT GmbH require increasing presence and local support outside of Germany. The global network of the Elektrobit Group companies provides a quick and cost effective infrastructure to establish such capabilities close to customers", says Johann Haas, Managing Director of 3SOFT GmbH.
Elektrobit and 3SOFT have comprehensive and complementary know-how in the fields of electronics and software engineering. 3SOFT GmbH has a strong focus and capability in entertainment and communications applications (Infotainment) and in real time operating systems for body control applications. The Elektrobit Group has a comprehensive knowledge of wireless technologies. Various wireless technologies are increasingly used in Infotainment and other applications in cars. Together the companies can offer a broad range of R&D services and solutions for automotive OEMs and their suppliers in Europe, Asia and Americas. The synergy benefits targeted with the acquisition are expected to show in the business of the Elektrobit Group in the long-term and at the earliest as of the year 2005. Market changes due to the dynamic business environment and possible challenges regarding the integration of the companies can complicate the accomplishment of such synergy benefits.
3SOFT GmbH is an embedded software company, established in 1988, focusing and specializing in professional product development and related support services (>95 per cent of sales) and software licences (<5 per cent of sales). In 2003 the automotive industry accounted for about 80 per cent of sales, and medical and industrial automation industries about 20 per cent of sales. More than 90 per cent of sales come from Germany. The main customers include major German automotive OEMs (Audi, BMW, Daimler Chrysler) and suppliers to these OEMs. The company is located in Erlangen (head quarters), Böblingen and Braunschweig in Germany.
The purchase price for the 3SOFT GmbH shares shall be paid by issuing 8,421,951 new Elektrobit Group Plc. shares and in addition by paying 9,066,667.07 euro in cash at closing. The new shares will be issued to 3SOFT GmbH's shareholders in a directed issue, which will be approved by the Board of Directors of Elektrobit Group Plc. on the basis of the authorisation given to the Board of Directors by the Annual General Meeting on March 25, 2003, and will be subscribed for today. The new shares will be subject to transfer restrictions, which shall expire with regard to approximately 25 per cent in 2005, with regard to approximately 25 per cent in 2006, with regard to approximately 25 per cent in 2007 and with regard to approximately 25 per cent in 2008. Determination of the acquisition price is based on the negotiated outcome, which the parties reached concerning the value of the companies' shares outstanding.
According to the parties' agreement Elektrobit Group Plc. has a right and on the other hand also an obligation to purchase the remaining 20 per cent of the shares in 3SOFT GmbH within certain periods of time during the years 2007, 2008 and 2009, however, in any case not later than on June 30, 2009. The purchase price for the option shall be determined based on a substance value component and on the other hand the profit producing ability of 3SOFT GmbH defined in more detail in the calculation principles agreed by the parties.
In Oulunsalo, March 8, 2004
Elektrobit Group Plc.
The Board of Directors
