Teleca/AU-System

Investors

It has been announced that, when the merger between Teleca and AU-System (both listed on the O-list of the OM Stockholm Exchange) is finalised, Bure Equity will acquire 16% of the shares, becoming, together with Dan Olofsson, the largest shareholder in the new company. Bure will acquire the shares from Dan Olofsson although the transaction is conditional upon the acceptance and implementation of Teleca’s share offer for AU-System. Bure will buy the shares already placed in a Swedish AB, with the payment submitted in three separate instalments. The first payment will be made at the time of closing, expected during Q1 2002, while the second and third payments will be made after 12 and 24 months respectively, based on the share price development. Currently, the largest shareholders in AU-System are Permira funds, holding 27.8%, Ericsson, holding 9.3%, Capital Group, ho,lding 6.4%, and Nordea Fonder, holding 4.6%. In total, these four shareholders own 48.1% of the share capital and votes in AU-System. Assuming that all AU-System shareholders accept the offer from Teleca, the shareholders of AU-System will hold 36.1% of the capital and 32.9% of the votes in the group following the merger. Dan Olofsson, who currently holds 47.4% of the share capital and 49.3% of the votes in Teleca, will hold 14.3% of the share capital and 16.3% of the votes in the group after the merger and following the sale of shares to Bure. Teleca is offering 0.2093 new series B share in Teleca for each share in AU-System, representing a premium of approximately 30%. The investment, which Bure views as a means to be involved in the consolidation of the IT consultancy market, will reside in Bure’s IT Solutions & Services division.

Company

Gothenburg-based Teleca has more than 1,200 employees and develops advanced software engineering services for technology companies, service providers and IT users within consumer electronics, telecom, the automotive industry and the medical technology industry. Teleca has subsidiaries in 10 European countries and over 40% of sales are generated from operations outside Sweden.

Established in 1974 by Ulf Jonströmer (currently CEO at Brainheart Capital) and headquartered in Stockholm, AU-System is a leading supplier of consulting services and technological solutions based on emerging technologies within IT and telecommunications. The AU-System Group originally comprised AU-System, Across Wirelees and iD2. In a deal valued at $135m, Schroder Ventures (now Permira) acquired 73% of AU-System Group’s shares in 1999, buying a mixture of new shares and existing shares belonging to Ericsson. Both Across Wireless and iD2 were sold to Sonera shortly before AU-System was floated on the OM Stockholm Exchange in June 2000.

The merged group will have a strong position in the IT and communications services vertical and is expected to play a major role in the European consolidation of this sector. The two parties have stated that, through the combined sales channels and complementary customer base of the two companies, the total effect on the merged group’s ‘utilisation’ is expected to be approximately 1.5 percentage points. Teleca is expected to improve its ‘utilisation’ by 1 percentage point through cross-selling of AU-System concepts, such as mobile handset applications. AU-Systems is expected to improve its utilisation by 2 percentage points, primarily through Teleca’s strong international sales channels. Through the merger, the two publicly listed companies are expected to reduce administrative costs related to internal support systems, offices, listing costs, audits etc. by approximately SKr 20m.

People

Peter Sandberg coordinated the investment on behalf of Bure Equity, which will appoint a board member.

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• Nordics