INCAP CORPORATION STOCK EXCHANGE RELEASE 31 May 2007 at 10.45 a.m.
Incap and TVS Electronics Limited, India, have signed an agreement on the acquisition of TVS Electronics' contract manufacturing unit in line with the Letter of Intent signed in February.
According to the agreement, TVS Electronics' contract manufacturing unit in Tumkur and the related design services in Bangalore will be transferred to Incap's subsidiary Incap Contract Manufacturing Services Pvt. Ltd. on 1 June 2007. The business operations acquired by Incap include the manufacturing services business as well as the property and the factory building with its equipment in Tumkur. The total value of the acquisition is about 400 million Indian rupees or approximately EUR 7.4 million.
The contract manufacturing unit in Tumkur is located within easy reach of Bangalore, approximately 80 kilometres away. There are about 230 employees working in the unit currently and, in addition to electronics manufacturing and product integration, its services also include materials procurement, distribution and logistics services as well as maintenance. With a floor space of approximately 6,000 square metres, the unit manufactures box-build products, such as power supplies and medical electronics. The unit's customers are equipment manufactures based in Europe and India.
Incap forecasts that its Indian operations will generate about EUR 8 - 10 million in revenue during June-December 2007. In order to attract new customers, investments will be made in further modern production capacity.
This acquisition is in line with Incap's strategy, which is geared towards growth and internationalisation. Presence in the growing markets of India and Asia will create new business potential. The closeness of procurement sources in Asia will enable more global and more effective purchasing of materials.
The electronics industry in India is estimated to grow strongly at an annual rate of 25-30%, and outsourcing is expected to increase by 30% annually. The customers targeted by Incap operate in industrial electronics, medical equipment manufacturing and the telecommunications sector.
Following this transaction, Incap's total number of personnel will rise to 730, of whom 45% will be employed in the Finnish units. In the future, the growth in the number of personnel is expected to take place mainly in units abroad.
"Our service ability will improve because we can now offer our globally operating customers even more competitive services", says Juhani Hanninen, President and CEO of Incap Corporation. "The markets in India are very promising especially for a company that flexibly manufactures medium-sized series like us. Acquiring a business was a suitable and quick way for us to establish operations in Asian markets because now, to start with, we have a stable customer base and well-functioning production operations in place."
INCAP CORPORATION
Juhani Hanninen
President and CEO
For additional information, contact:
Juhani Hanninen, President and CEO, tel. +358 50 556 7199
Anne Sointu, Chief Financial Officer, tel. +358 40 347 2059
Hannele Pöllä, Director, Communications and Investor Relations, tel. +358 40 504 8296
DISTRIBUTION
Helsinki Stock Exchange
Principal media
INCAP IN BRIEF
Incap Corporation is a fast-growing electronics contract manufacturer whose comprehensive service covers the entire product lifecycle from design and manufacture to repair and maintenance services. The company's main customer sectors are leading equipment suppliers in telecommunications, electrical power technology, the automation and process industries as well as measurement technology, safety electronics and healthcare. The Incap Group's revenue in 2006 amounted to EUR 89 million and the company currently employs about 540 people. Incap's share is listed on the Helsinki Stock Exchange and is a component of the Nordic Small Cap list within the information technology sector. For additional information, please visit www.incap.fi