Aastra Technologies Limited
TSX : AAH

Aastra Technologies Limited

July 14, 2005 08:23 ET

Aastra to Acquire DeTeWe's Telecommunication Business from Rochling Group

BERLIN, GERMANY and TORONTO, ONTARIO--(CCNMatthews - July 14, 2005) - Aastra Technologies Limited (TSX:"AAH") is pleased to announce today that it has entered into an agreement with DeTeWe Deutsche Telephonwerke AG & Co KG ("DeTeWe KG"), a member of the Rochling Group based in Germany, to acquire DeTeWe KG's telecommunication systems business (the "DeTeWe Business"). The acquisition is subject to customary closing conditions and is expected to close in the third quarter of 2005. Subject to customary closing adjustments, the purchase price is expected to be approximately EURO 35 million (CDN $51 million at current exchange rates), of which approximately EURO 18 million (CDN $26 million at current exchange rates) will consist of a vendor loan from DeTeWe KG.

From its headquarters in Berlin, Germany, the DeTeWe Business develops, markets, and supports private branch exchange ("PBX") telephone systems and certain consumer wireless products. Under Canadian GAAP, the DeTeWe Business generated revenue of approximately EURO 175 million (CDN$255 million at current exchange rates) in 2004 and experienced a material loss primarily resulting from restructuring expenses and discontinued operations. The DeTeWe Business was restructured significantly in 2004 from a staff of approximately 1,300 employees to the current level of approximately 700 employees and certain non-core operations were discontinued.

The DeTeWe history extends back more than 100 years in Germany to the manufacturing of the first German telephones. It has a very well developed German distribution network with over twenty regional sales offices. The DeTeWe Business is primarily focused in supplying small PBX systems, distributing PBX systems of other vendors and offering DECT (enterprise wireless) systems, both under its own brand as well as an OEM supplier for systems that interoperate with other PBX vendors.

"Due to current trends, the German market is not sufficient to viably sustain the DeTeWe Business in the long term", said Georg Duffner, President of the Management Board of the Rochling Group. "On the other hand, the economies of scale required by the DeTeWe Business to remain globally competitive cannot be simply achieved by remaining within the Rochling Group", continued Duffner. "We selected Aastra as a divestiture partner for the DeTeWe Business because it is primarily focused in telecommunications with global operations and, as a result of the divestiture, the Rochling Group would be able to concentrate on its core competencies", Duffner explained.

"The enterprise telephony market is in a state of consolidation and the DeTeWe Business complements our current Western European operations" said Francis Shen, Chairman & Co-CEO of Aastra. "As enterprise communication migrates to Voice over Internet Protocol (VoIP), Aastra will have the size, scope and expertise to offer converged VoIP solutions that are customized to the specific needs of each country within the Western European market,"

"The DeTeWe Business will strengthen our presence in Western Europe by allowing us to leverage a well developed German distribution network and enhance our PBX portfolio by including DeTeWe products, such as their leading edge enterprise wireless solutions" said Tony Shen, President and Co-CEO of Aastra. "We appreciate the investment and commitment of DeTeWe's customers and look forward to strengthening these relationships by continuing to work with our partners to offer converged VoIP solutions that are specifically customized to the needs of the German market."

About Rochling

The Rochling Group is a private company with head office in Mannheim, Germany. Rochling focuses primarily on high performance plastic technologies with operation worldwide. Rochling is a family business that was founded 183 years ago as a trading house for coal in the Saarland area of Germany. In 2004, the Rochling Group generated revenue of approximately EURO 1.4 billion and employed 8,000 individuals.

About Aastra Technologies Limited

Aastra Technologies Limited (TSX: "AAH"), headquartered in Concord, Ontario, Canada, develops and markets products and systems for accessing communication networks. Aastra's products include a full range of residential and business telephone terminals, Enterprise Private Branch Exchanges (PBX), network access servers and high quality digital video gateways. Aastra serves the majority of telephone companies and certain cable operators and broadcasters in North America and Europe, with a growing presence in South America and Asia. For more information on Aastra, visit our Web site at http://www.aastra.com.

This press release contains forward-looking statements that involve risks and uncertainties. Forward-looking statements include statements of plans, objectives, strategies and expectations. The words "anticipate," "believe," "estimate" and "expect" and similar expressions are intended to identify forward-looking statements. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations are included in the reports filed by Aastra with securities regulatory authorities in Canada. Aastra disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The Toronto Stock Exchange has neither approved nor disapproved of the information contained in this statement.

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