TELESTE MOVES AHEAD BY ACQUISITIONS IN GERMAN NETWORK SERVICES MARKET
TELESTE CORPORATION STOCK EXCHANGE RELEASE 31.12.2008 AT 12:00 TELESTE MOVES AHEAD BY ACQUISITIONS IN GERMAN NETWORK SERVICES MARKET Teleste Corporation proceeds with development of its services business by acquiring three German cable network services companies. The companies concerned, specialising in upgrading and maintenance of cable and house networks, are MKS companies, Young-Net GmbH and Antel GmbH. The core regions of MKS and Young-Net include North Rhine-Westphalia, Lower Saxony and Rhineland-Palatinate in the Western and Central Germany, whereas Antel operates in the Southern region of Bavaria. The former principal owners - Volker Meyer at MKS, Tobias Jung at Young-Net and Josef Würtz at Antel - will continue in their current managerial positions. With these acquisitions Teleste will become one of the key service providers in cable networks business in Germany. Its main clientele consists of key German cable operators supplying cable network access to approximately 20 million end-customers. The acquired companies provide services for the operators both directly and through the previously established affiliate company Cableway. After these acquisitions Teleste's holding of Cableway will rise up to 50%. Cooperation with Cableway enables making available a comprehensive range of services required by the major operators. As the single biggest cable network country in Europe Germany constitutes strategically one of Teleste's most important market areas. In 2008, net sales of the acquired services companies stand at approximately EUR 30 million with their business profitability on a sound level. The impact of this purchase to Teleste's net sales for 2009 is estimated to be more than EUR 30 million. The transaction is expected to improve Teleste's profitability for 2009 with no essential effect on Teleste's equity ratio; on the other hand, gearing ratio will increase to some degree. The acquisitions increase the number of Teleste personnel by 315. The consolidated equity of the acquired companies at the time of the deal equals about EUR 3.5 million with the balance sheet total amounting to approximately EUR 13.5 million. The initial purchase price of the companies share capital stands at EUR 8.7 million. This price may increase depending on the development of the net profit of the acquired companies in the next two years. The initial purchase price will be paid in cash with any potential additional price partly in Teleste shares. The transaction becomes effective on 1 January 2009. The objective is to develop network services provided for the operators locally through the acquired companies by incorporating them in Teleste's overall service business strategy. For this the core expertise and local nature of these companies create favourable conditions. Moreover, the companies concerned are internal customers for Teleste's cable network equipment providing at the same time distribution channels into German cable operator market. Teleste's objective is to create a comprehensive product range in support of its service offering. Founded in 1954 Teleste is an international technology group specialising in broadband data communication systems and solutions. The Group is divided into the following strategic Business Units: Customers of Broadband Cable Networks include cable operators and majority of the business is carried out through direct customer contacts. Video Networks supplies solutions involving optical signal transmission and video network management software solutions for video surveillance. Major part of its business is conducted through system integrators. Both Units are ranked among the leading providers in their respective market areas and are recognised globally for their know-how and ability to present technically cutting edge solutions on a continual basis. In 2007 the Group's net sales totalled EUR 125.1 million. At the year-end the Group employed on average 672 persons. The company runs about 30 offices worldwide and more than 91% of Teleste's net sales are generated outside Finland. The company is listed on the OMX Nordic Exchange in Helsinki. For additional information access www.teleste.com TELESTE CORPORATION Jukka Rinnevaara CEO FOR MORE INFORMATION: CEO Jukka Rinnevaara, tel +358 2 2605 866 or +358 400 747 488 DISTRIBUTION: NASDAQ OMX Helsinki Key media www.teleste.com