December 07, 2006 03:38 ET

EUROTECH S.p.A : Acquisition of Applied Data Systems Inc

AMARO, ITALY -- (MARKET WIRE) -- December 7, 2006 --

Eurotech, a leading designer and developer of high performance and low power embedded computing systems, announces the acquisition of Applied Data Systems Inc. ("ADS") for an initial consideration of $41.5 million, on a cash free debt free basis, equal to a multiple of 8.6x earnings before interest, tax, depreciation and amortisation ("EBITDA") for 2006. An additional earnout payment of up to $12.5 million may be payable, based on 7xEBITDA for the calendar year 2007 less the initial consideration. The initial consideration and the additional earnout will be paid in cash.

ADS is a global leader in the design, development and production of "application-ready" embedded computer systems, typically running Windows CE or Linux. Its products are known for their sophisticated graphics, low power consumption and robust functionality. ADS specialises in helping customers connect their applications to the latest available wireless, mobile and enabling technologies. Their model of providing a complete embedded computer "beneath" the application, and configurable to its customer's specifications, is innovative in the industry and a significant factor in the company's robust growth over the last 5 years.

ADS' partners include ARM, Intel, Marvell, Freescale, Cirrus, Microsoft (Embedded Windows CE), Arrow, Avnet, Sharp, Kyocera, Skelmir, and IBM/Dynapro. Significant clients include Ricoh, Medtronic, Tyco, Philips, Voxware, Agilent Technology, and General Dynamics, into industries such as medical monitoring, fleet management, Point Of Sale, process control, digital signage and gaming.

In the year to 30 September 2006, ADS's unaudited turnover was $28 million and EBITDA was $4.8 million. Eurotech's Directors believe the acquisition will be earnings enhancing in the first full year of the acquisition.

Moreover, ADS recently entered into an agreement for the acquisition of 65% of the share capital of Chengdu Vantron Technology Ltd, a R&D company based in China, with approx 30 engineers employed, that develops and manufactures embedded computer devices.

Commenting on the transaction, Eurotech Chief Executive, Roberto Siagri, said:

"The enhanced product portfolio and wider international presence made possible by this acquisition will improve Eurotech's global offering - particularly in the field of low power embedded technologies - and strengthen our competitive position."

"ADS has an excellent reputation, an extensive technology base and a strong management team committed to building on the success it has already achieved. The business is an excellent fit for Eurotech: the two companies share a number of technologies in common, as well as a geographic footprint. We expect this deal to bring immediate benefits to both businesses."

"Eurotech has made no secret of its intention to acquire other businesses which offer a good strategic fit, in addition to growing organically. We continue to look for acquisition opportunities in the US, UK and continental Europe that support our strategic aim to build strength, size and scale in our chosen markets and to enhance shareholder value."

Robert Olsen, President of ADS, added:

"We're proud to be a part of the Eurotech team. The synergies, in capital, technology, and manufacturing, will greatly enhance value to our customers and leverage our ability to continue to provide quality embedded computer systems in an exciting and rapidly growing market".


Notes to editors

Eurotech designs and develops innovative high performance and low power embedded computing systems. With operations in Europe, North America and Asia, the Group's products are used in industrial, defence, transportation and medical applications.

Eurotech's miniaturised computer business designs and manufactures products to the miniaturisation requirements of its customers. The products range from compact stationary PCs (headless or HMI) to embedded, ruggedised mobile computers, designed to operate in harsh environments. Eurotech's high performance computing business develops high performance computers using standalone and proprietary high-speed interconnection technologies to link numerous miniaturized computers. Eurotech recently extended its product range to include embedded-PCs that operate on standard platform solutions.

In the year ended 31 December 2005, Eurotech generated revenues of approximately EUR 29.9 million, an approximately 79 per cent. increase on 2004 revenues, and EBITDA of approximately EUR 3.3 million. As at 31 December 2005, Eurotech had 158 employees working in its offices in Italy, France, Finland and the US.

On 1 April 2006, Eurotech acquired Arcom Control Systems Limited and Arcom Control Systems Inc. from Spectris plc. Following this acquisition, the Eurotech group had 259 employees and a combined pro forma 2005 turnover of approximately EUR 53 million.

Eurotech listed on the Italian stock exchange, organised and regulated by the Borsa Italiana S.p.A., on 30 November 2005. On 1 August 2006, Eurotech completed a EUR 109 million equity fundraising.

Eurotech S.p.a.

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