ECHING, Germany -- Kontron, a leading global provider of embedded computing and open modular solutions, has reached an agreement with Intel® Corporation to acquire its Communication Rackmount Server operation of 1U, 2U carrier-grade rackmount and IP network security server products. The transaction, subject to regulatory review and standard closing conditions, is expected to close shortly.

The Intel® carrier-grade rackmount and network server team mainly centered in Columbia, South Carolina, and Penang, Malaysia, includes various employees engaged in engineering, product development, product marketing, technical support and operations. Kontron’s Management expects for 2009 revenue from this new acquisition of more than USD 40 million. This acquisition is considered a strategic opportunity and is expected to close shortly. This intact group in Intel®, with around 70 employees, has many years of expertise in world-class server technology, including high-density mechanical and electronic design, thermal and vibration analysis, and implementation of high-standards of secure and uninterruptible operations. To help ensure a continuous supply of products and a high quality of support and services to Intel® customers, both Intel® and Kontron will work jointly in the transition period to provide a smooth and seamless hand-over of products, projects, and customer and distributor relationships. Customers will also be backed by Kontron’s strong global presence, flexible supply chain capabilities including a high-volume manufacturing services facility in Penang, Malaysia, and engineering and technical support services.

“The benefits for customers are tremendous,” said Kontron CEO Ulrich Gehrmann. “Customers will continue to receive the latest technology in computing platforms while being able to choose from a single source. Both the existing Intel® products and any future Intel® Architecture multi-core server designs will firmly establish Kontron as the leading provider of multi-core carrier-grade server platforms. After many years of working closely with Intel®, we fully anticipate strong favorable long-term growth.”

Kontron AG