Tecnomen Corporation STOCK EXCHANGE RELEASE December 15, 2008, at 8.30am TECNOMEN AND LIFETREE COMBINE Tecnomen has signed agreements through which Lifetree Convergence Ltd. (“Lifetree”), an India-based provider of Convergent Billing and Customer Care, Rating, and Messaging platforms, will combine with Tecnomen. Through these agreements Tecnomen will acquire up to 96.6% of the share ownership of Lifetree for a consideration of EUR 33.2 million, to be paid through a combination of cash and issuance of new shares of Tecnomen. For the financial period ending on March 31, 2008, according to Indian GAAP and with 63.0 as the EUR/INR exchange rate, Lifetree's net sales came to EUR 11.3 million; profit after taxes was EUR 3.4 million, and the company had no debt and net assets of EUR 8.4 million. Lifetree had a cash balance of EUR 9.5 million as on 31st Oct, 2008. This translates to an enterprise value (for 100%) of EUR 24.9 million. Of the consideration, EUR 21.4 million will be paid in cash and the remainder EUR 11.8 million in new Tecnomen shares to be issued. In the transaction, the issue price applied for Tecnomen's shares will be EUR 0.86 per share. The cash portion will be financed in part with a long-term loan and partly from the cash funds of Tecnomen. The shareholders of Lifetree will be paid partly in cash and partly in new Tecnomen shares. The new Tecnomen shares issued to Management Shareholders are subject to a three-year lock-up. Tecnomen will extinguish its current stock option pool and will create a new option pool of Tecnomen shares which shall be a maximum of 8.5% of Tecnomen's fully diluted shares, not however exceeding 6,840,036 options. Post the transaction, IFC, as a current Lifetree shareholder, will become a shareholder in Tecnomen holding about 6.17% shares and 5.65% on a fully diluted basis. This transaction will create significant long-term value for its shareholders. The combined entity - Tecnomen Lifetree Plc - will offer a highly synergistic Product suite and will be in a position to offer an unmatched Convergence-oriented value proposition to customers. The combined proposition will map to 100% of a Telco's OSS/BSS and messaging requirements. The expanded global reach established by this transaction will enhance coverage in matured and emerging markets. The combined entity's clientele will comprise more than 120 customers, spread across 70 countries. Coverage of emerging markets, in particular, will be unmatched. Tecnomen Lifetree Plc will have strong growth potential and increased cost-competitiveness, with strong penetration into Telecoms Operator group accounts with multiple revenue-generating properties, as well as a competitive-cost R&D and delivery base in India. Tecnomen CEO Jarmo Niemi will be the CEO of the new company, and Atul Chopra, the Managing Director and CEO of Lifetree, will be appointed as the combined Company's COO & President. "The proposed transaction is in line with our goal of being a fully Convergent Charging and Billing solutions provider and provides an opportunity to complement our strong presence in the market for Pre-paid products with a strong presence in the Converged landscape. It also adds to our Product portfolio and enhances the competitiveness of our Messaging business unit. The transaction provides access to a larger customer base in emerging markets such as Africa and Asia, to drive revenue growth in coming years. This complementary combination represents a perfect strategic fit and delivers a substantial opportunity for solid future growth of the combined entity,” says Niemi. From the perspective of Lifetree, Chopra explains, “This is an attractive combination. Lifetree has, in the relatively short span of its existence, built an organization with high penetration in emerging markets with both top and bottom-line growth. We are now looking for inorganic options to generate further economies of scale and an opportunity to leverage our strong mind share and IP. We believe this transaction will immensely benefit all stakeholders, including existing and future customers, who will now gain the benefit of our complementary value proposition”. The closing of the transaction is subject to certain approvals at the Tecnomen shareholders' meeting and is subject to standard regulatory and statutory approvals. The transaction is expected to be completed by the end of March 2009. Upon completion of the transaction, Lifetree will become a subsidiary of Tecnomen. Also prior to closure, a proposal to rename the company as “Tecnomen Lifetree” will be put forth for shareholders' approval. In connection with the listing of new shares, Tecnomen will publish a prospectus. Tecnomen and Lifetree will hold a press conference at 13:00pm on December 15, 2008, in the Pavillion conference room at the Scandic Simonkenttä, in Helsinki. The material presented at the press conference will be available at www.tecnomen.com and www.lifetreeindia.com. Appendix: Presentation about the transaction TECNOMEN CORP. Board of Directors FURTHER INFORMATION Lauri Ratia, Chairman of the Board of Tecnomen, at tel. +358 50 2922 Jarmo Niemi, CEO of Tecnomen, at tel. +358 9 8047 8799 DISTRIBUTION NASDAQ OMX Helsinki Oy Major media www.tecnomen.com About Tecnomen Tecnomen, founded in 1978, is one of the leading suppliers of messaging and charging solutions for telecom operators worldwide. Tecnomen markets and sells its products and services through its own organisation, as well as through global and local partners, and has supplied its products to more than 100 customers around the world. Headquartered in Espoo, Finland, Tecnomen has 360 employees working in 15 locations worldwide. Tecnomen is listed on the main list of NASDAQ OMX Helsinki Ltd. For more information on Tecnomen visit www.tecnomen.com About Lifetree Convergence Limited Lifetree is a Telecommunications-focused technology product company. It is a provider of Operational Support Systems (OSS) and Business Support Systems (BSS) software and also offers Content Management and Delivery platforms. The company, which focuses on emerging economies such as Africa, the Middle East, and the Asia-Pacific region, has more than 40 installations worldwide. Headquartered in New Delhi, India, Lifetree has around 400 employees. For more information on Lifetree, visit www.lifetreeindia.com. About IFC IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit www.ifc.org.
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