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Prevas makes major investment in product development of embedded systems - acquires specialist expertise from Teleca

The market for embedded systems is undergoing great expansion. Over the past year, Prevas'
efforts to meet this demand have included extensive recruitment and a number of acquisitions
intended to increase 2007 sales by over 60 percent. The latest acquisition will be final at the end of
the year. Prevas will then take over business relations and 99 consultants from the Teleca Life
Science and Teleca Embedded Solutions units. The purchase price of SEK 32 million will go to seller
auSystems Sweden East AB, a subsidiary of Teleca AB. The acquired Teleca operations are
expected to have sales of about SEK 115 million in 2007 and generate a positive effect on earnings
in the amount of SEK 9 million before tax.

“This is Prevas´ most important acquisition to date," says Anders Englund, CEO of Prevas. “For one, it makes us a size that makes Prevas even more interesting as a development partner for large development projects, which creates the right conditions for even closer collaboration with our customers. Secondly, it confirms our position as a Nordic leader in embedded systems, which enhances our ability to recruit the best employees in an increasingly tougher recruitment market. Thirdly, it makes us a size that makes us more interesting in the stock market, which benefits our shareholders."

Teleca Life Science is a design house for medical devices and analytical instruments, operating both internationally and regionally. Teleca Life Science has 58 employees, of which 40 are in Stockholm and 18 are in Uppsala. The unit has developed products awarded with the international “Medical Design Excellence Award" a total of three times - twice in 2005 and once in 2006. Its customers include Siemens Medical Solutions, Axis-Shield, Aerocrine, Elekta, Maquet and GE Healthcare.

Teleca Embedded Solutions is a design house that focuses on the development and integration of mobile and embedded systems. Teleca Embedded Solutions has 41 employees in Stockholm. Its customers include SAAB, Ericsson, Nanoradio and Cale Access.

Through this acquisition, Prevas takes a dominate position in the Stockholm and Uppsala embedded system markets, with 120 employees in Stockholm and 35 in Uppsala. The international dealings of the acquired units enhance the internationalization initiated by Prevas. Teleca Life Science´s branch expertise supplements Prevas´ previous experience in the development of medical technical equipment and analysis instruments.

Prevas´ strategy is to increase the number of finished components - both its own and those of partners - in its solutions. Both Teleca Life Science and Teleca Embedded Solutions own their own electronics and software components. This shortens development times and increases the quality of product development, which in turn makes it possible to quickly increase Prevas' share of components in its deliveries. The acquisition also includes powerful development tools and lab instruments. Teleca Life Science and Teleca Embedded Solutions originate from one of Sweden´s first development firms for products on a consulting basis - Sapia Mekatronik
(1986 -1994) and Sigma Design & Development (1994 - 2001).

The sale of Teleca Life Science and Teleca Embedded Solutions is part of Teleca´s restructuring plans. The deal is the result of the refinement and concentration of activities in auSystems that Teleca announced in conjunction with its Q3 report.

At Prevas, a Nordic leader in embedded systems, the acquired units will obtain full management focus. Business undertakings with weak profitability are already closed or not included in the acquisition. Prevas can integrate both units with only marginal cost increases, particularly since no administration is part of the acquisition. This means a drop in cost levels per employee for both the acquired units and Prevas. Combining the operations in both Stockholm and Uppsala will generate additional cost-saving opportunities. No layoffs are planned in conjunction with the acquisition. With no additions, it provides a much needed boost on the consulting side.

“I am very pleased that Prevas is acquiring our Teleca Life Science and Embedded Solutions units in Stockholm. It is an industrially correct deal in which this unit under Prevas provides both customers and our consultants a wholly new focus and there by good conditions for very positive development," says Örjan Frid, President of auSystems AB.

The assets and liabilities agreement has been signed with a takeover date of January 1, 2007. The purchase price amounts to SEK 32 million for fixed assets. The value of other acquired assets and liabilities will be added to the purchase price. The acquisition is financed by means of loans. The acquired units will be part of the Prevas Group. A profit margin of 10 percent is anticipated for the first half of 2008. The units will be fully part of Prevas´ consolidated accounting as of the first quarter of 2007.

About Prevas

Prevas is an innovative IT company with a strong corporate culture that gives customers a world-class competitive edge. The company provides consultant services, products, and support to companies developing products with high IT content or which need to streamline or automate their business. Prevas´ solutions are renowned for customer benefits, innovation and reliable delivery. Prevas is listed on the Stockholm Stock Exchange, has about SEK 300 million in
sales and has about 300 employees in Sweden and Denmark.
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About auSystems AB

auSystems specializes in services with high demands on performance and integration of advanced software and IT solutions. auSystems provides traditional IT consulting services, research, development and testing. Customers are primarily made up of network equipment providers, operators, media, automotive industry, large companies and government organizations.
auSystems is part of the Teleca Group and has 1,400 employees in 8 European countries.
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