NOTE acquires Ericsson Anslutningssystem
Ericsson Anslutningssystem is a subsidiary of the Ericsson Group with strong expertise in production technology. The business comprises production development, prototype development and production of small to medium-sized series for the telecom and electronics industry. The company will remain a supplier to Ericsson and focus on regional customers in Norrland in line with NOTE’s “Excellence Plants” network concept.
The deal in brief
NOTE AB will acquire Ericsson Anslutningssystem AB in Skellefteå from Ericsson. The acquired company will change name to NOTE Skellefteå ABOUT and become part of the NOTE Group with Berndt Eriksson as new Managing Director. The rest of the staff will remain and no change in staff numbers (approx. 100) is foreseen. In addition to the Ericsson Group, Ericsson Anslutningssystem has a number of regional customers. The business will be transferred on 1 January 2005.
Payment will be in the form of a single cash payment. The transaction is not expected to generate any goodwill and will largely be financed with funds raised through the new share issue in spring 2004.
Impact on the NOTE Group
The acquisition is expected to increase sales by approximately 190 million in 2005. Ericsson Anslutningssystem currently has an operating margin of about 4 per cent. After the integration phase, which is concentrated to the first quarter, the business is expected to contribute in accordance with for the NOTE Group’s targets for financial margins. The cost of integrating the business is estimated at SEK 2 million. The deal also comprises a long-term preferred supplier agreement with Ericsson. In addition to the Skellefteå unit NOTE will be providing production to Ericsson through its low-cost units (Industrial Plants) and global units (ems-ALLIANCE).
NOTE will use NOTE Skellefteå to step up its marketing activities in northern Sweden, which is expected to further increase sales as of the end of 2005.
“Ericsson Anslutningssystem is a well-run business that fits into our business model”, Erik Stenfors, NOTE’s CEO comments. “This deal gives us good coverage of product owners in the north of Sweden and is therefore an important strategic move for NOTE”.
“We believe Ericsson Anslutningssystem will be in a better to strengthen its long-term position as part of a group focusing on production technology and production”, Yngve Hässler at Ericsson’s Business Unit Network Technologies, comments. “We also believe the deal will ensure a continued strong partnership between Ericsson and NOTE Skellefteå”.
“We look forward to becoming part of a Group focused on contract manufacturing”, Berndt Eriksson, Managing Director of Eriksson Anslutningssystem, says. “Now we will increase our focus on general sales of production and production expertise, which will also lead to a continuous improvement of our own pool of expertise”.
For further information, please contact:
Erik Stenfors, Managing Director and CEO, NOTE, phone +46 (0)176-799 01 or +46 (0)709-50 80 70
Yngve Hässler, Business Unit Network Technologies, Ericsson, phone +46 (0)8-719 00 00
Berndt Eriksson, Managing Director, Ericsson Anslutningssystem AB, phone +46 (0)910-84510
Invitation to press conference
Time: Tuesday 28 December, 11:00 a.m.
Place: Ericsson Anslutningssystem AB, Svedjevägen 12, Skellefteå
NOTE is one of Scandinavia’s leading contract manufacturers of electronics, offering specialist expertise at all stages of the value chain – from design and development to manufacturing and after-market services.
NOTE has operations in Sweden, Finland, France, the United Kingdom, Estonia, Lithuania and Poland.
In 2003 the Group generated a pre-tax profit of SEK 63 million on net sales of SEK 859 million.
The Group currently has about 950 employees. NOTE is listed on the O list of the Stockholm Stock Exchange.
Ericsson shapes tomorrow’s communication solutions for mobile Internet and broadband through technological leadership. By offering innovative solutions in more than 140 countries, Ericsson is helping to build the world’s most powerful communication businesses. www.ericsson.se