“We are pleased to find a strategic buyer for Netcom Consultants and believe that the company will continue to thrive under the ownership of Cybercom,” says Henry Guy, President and Chief Executive Officer of Modern Holdings.
Modern Holdings owns Netcom Consultants, which was launched in 1993. In 2004, Netcom Consultants turned over SEK 62 million and reported a 12% operating margin. The acquisition involves 40 employees in Sweden and Singapore and in sites in Asia and Africa, through work at operators associated with Millicom.
Netcom Consultants have an attractive customer base with Tele2, Millicom, the Swedish Defence Materiel Administration (FMV), and several municipalities in Sweden as examples of main customers.
"Netcom Consultants provides consulting services within telecom networks, technologies, billing, and services development," says Mats Alders, president and Chief Executive Officer of the Cybercom Group. "With this operation, we strengthen our international telecom market presence within strategically important areas of expertise - and with new, key customers."
Starting in May, Netcom Consultants will become a wholly owned subsidiary of Cybercom and be consolidated within the Group. The fixed purchase price is SEK 35 million paid in newly issued Cybercom shares (determined as the corresponding value on April 29, 2005) or if Cybercom so elects, in cash. Means of payment may be determined uptil the day of payment. The transaction will most definitely result in a dilution of 10- 12%. In addition, a supplementary price consideration of maximum SEK 6 million might in cash be paid - depending on sales in 2005. The acquisition will have an immediate and significant positive impact on Cybercom's operations net earnings, and strategically as well as financially. The acquisition of Netcom Consultants will support Cybercom Group in reaching the stated sales target of a turnover of SEK 750 million and an operating margin of 8%.
If, as expected, the AGM on the 22 April authorises the Cybercom board to issue new shares, then the board will exercise that authority.
The acquisition will be covered in more detail when Cybercom this morning presents its Q1 report. Analysts and journalists are cordially invited to a press meeting today, at 8 am at the Nordic Sea Hotel, Vasaplan Stockholm, in the Vågen room.
For more information, contact:
Mats Alders, president and CEO, Cybercom, tel. + 46 707 25 32 00
Henry Guy, president and CEO, Modern Holdings, tel +1 212 702 4558
Bengt Levin, manager of Cybercom Group Sweden, tel. +46 708 57 62 75