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11.08.2008 Siemens has decided on a partner for its enterprise communications business.
The Gores Group, an American investor, will acquire a 51% stake in Siemens Enterprise
Communications (also known as SEN). “We have been looking for an opportunity to
expand our presence in the enterprise networking and communications space and this
partnership with Siemens provides the perfect fit,” noted Alec Gores, founder and
chairman of Gores. Siemens will retain a stake of 49%. ”We are continuing to
intensify the focus of our portfolio on the three Sectors, which are Energy,
Industry and Healthcare. In Gores, we have found an extremely experienced technology
and telecommunications partner, who strengthens the business with the contribution
of the two assets Enterasys and SER Solutions. We are confident, that this will
benefit the employees and customers in the long term. As announced already in
February, the transferred business will be solidly financed,” stated Joe Kaeser,
Siemens CFO. The reorganization of Siemens Enterprise Communications, previously
announced by Siemens, has made significant progress, ensuring a clean start for
the joint venture. The deal of the joint venture is expected to be closed at the
end of Siemens fiscal year 2008, pending regulatory approval.
Gores and Siemens plan to invest approximately ˆ350 million in the joint venture -
not including expenditures for research and development and other expenditures as
part of the ordinary course of business. The investments will be made in order to
launch innovative Siemens Enterprise Communications products on the market, acquire
other technology platforms to capitalize on the powerful Siemens Enterprise
Communications distribution organization and further drive the expansion and transition
of the business from a hardware supplier to a software and service provider.
Gores, which is focused to grow businesses, has extensive management expertise
in the technology and telecommunications area and has rapidly restructured businesses
undergoing fundamental structural changes and established them as successful
independent companies or successfully consolidated them with other companies in
its portfolio. Gores has an extensive expertise in Europe as well, where they made
several investments in the past few years.
When the joint venture is launched, Siemens Enterprise Communications business will
also be supplemented and strengthened by combining the business with two of Gores’
current portfolio companies – Enterasys, a network equipment and security solutions
provider and SER Solutions, a call center software company. “Combining the three
companies will lead to a more complete enterprise networking and communications
offering that will leverage Siemens Enterprise Communications powerful distribution
capabilities, global reach and extensive customer base,” stated Alec Gores.
With its investment of approximately ˆ175 million, which represents half of the
total amount of the planned investment of approximately ˆ350 million, Siemens helps
Siemens Enterprise Communications to grow. By creating a solid capitalization and
further transaction costs as well as liabilities of Siemens Enterprise Communications,
there will be a substantial financial impact in the fourth quarter of Siemens
fiscal 2008.
On an operational level, business will be driven by Gores. The joint venture will
be entitled to continue using the Siemens brand. Key patents and licenses will be
transferred to the joint venture.
Production facilities in Leipzig, Germany, and Curitiba, Brazil, and Thessaloniki,
Greece, will be transferred to the joint venture. Production at the Leipzig facility
is guaranteed by contractual agreements until 2011. Curitiba will be an important
production facility for the joint venture. For Thessaloniki different options are
being evaluated.
Siemens Enterprise Communications will continue to be a preferred supplier to
Siemens, to use the Siemens One sales network and to cooperate on customer projects
with Siemens. Siemens Enterprise Communications innovative new products like the
OpenScape UC Server will remain an integral part of the portfolio. Gores and Siemens
have agreed that Siemens Enterprise Communications will continue to offer its
OpenPath migration strategies for existing product families in order to ensure
a smooth transition to the new Unified Communications solutions. Support and
upgrades for Siemens Enterprise Communications products, especially HiPath 3000
and HiPath 4000, are to be continued for the long term.
About The Gores Group, LLC
The Gores Group, LLC, founded in 1987, is a private equity firm focused on
acquiring controlling interests in businesses which can benefit from the firm's
operating experience and flexible capital base. The firm combines the operational
expertise and detailed due diligence capabilities of a strategic buyer with the
seasoned M&A team of a traditional financial buyer. The Gores Group maintains
offices in Los Angeles, Boulder and London. For more information, please visit
www.gores.com.
For any press related questions find the following contact details below:
The Gores Group
Frank Stefanik
+1 310 209 3010
Sitrick and Company
+1 310 788 2850
Michael Sitrick
Mike_sitrick@sitrick.com
Terry Fahn
Terry_fahn@sitrick.com
About Siemens Enterprise Communications
Siemens Enterprise Communications GmbH & Co. KG is one of the world's
leading suppliers of Unified Communications technologies. The company's unique
Open Communications approach to providing software, solutions and services
for enterprises of all sizes enables business processes to be more productive,
faster and more secure - with any device, network or information technology
infrastructure. The company is a wholly owned subsidiary of Siemens AG with
global headquarters in Munich, Germany. In fiscal 2007 Siemens Enterprise
Communications had revenues of some 3.2 billion EUR. More about Siemens Enterprise
Communications GmbH & Co. KG at
www.siemens.com/open.
About Siemens AG
Siemens AG (Berlin and Munich) is a global powerhouse in electronics and
electrical engineering, operating in the industry, energy and healthcare sectors.
The company has around 400,000 employees (in continuing operations) working to
develop and manufacture products, design and install complex systems and projects,
and tailor a wide range of solutions for individual requirements. For over 160 years,
Siemens has stood for technological excellence, innovation, quality, reliability and
internationality. In fiscal 2007, Siemens had revenue of ˆ72.4 billion and income
from continuing operations of ˆ3.9 billion (IFRS). Further information is available
on the Internet at: www.siemens.com.
This document contains forward-looking statements and information – that is,
statements related to future, not past, events. These statements may be identified
by words as “expects,” ”looks forward to,” “anticipates,” “intends,” “plans,”
“believes,” “seeks,” “estimates,” “will” or words of similar meaning. Such statements
are based on our current expectations and certain assumptions, and are, therefore,
subject to certain risks and uncertainties. A variety of factors, many of which are
beyond Siemens’ control, affect its operations, performance, business strategy and
results and could cause the actual results, performance or achievements of Siemens
worldwide to be materially different from any future results, performance or
achievements that may be expressed or implied by such forward-looking statements.
For us, particular uncertainties arise, among others, from: changes in general
economic and business conditions (including margin developments in major business
areas); the challenges of integrating major acquisitions and implementing joint
ventures and other significant portfolio measures; changes in currency exchange
rates and interest rates; introduction of competing products or technologies by other
companies; lack of acceptance of new products or services by customers targeted by
Siemens worldwide; changes in business strategy; the outcome of pending investigations
and legal proceedings; our analysis of the potential impact of such matters on our
financial statements; as well as various other factors. More detailed information
about our risk factors is contained in Siemens’ filings with the SEC, which are
available on the Siemens website, www.siemens.com, and on the SEC’s website,
www.sec.gov. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary materially
from those described in the relevant forward-looking statement as expected, anticipated,
intended, planned, believed, sought, estimated or projected. Siemens does not intend
or assume any obligation to update or revise these forward-looking statements in light
of developments which differ from those anticipated.
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