Aastra to Buy DeTeWe

Aastra to acquire DeTeWe’s Telecommunication business from Röchling Group

July 14, 2005

2 Min Read

BERLIN and TORONTO -- 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 Röchling 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 €35 million (CDN $51 million at current exchange rates), of which approximately €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 €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 Röchling 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 Röchling 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 Röchling Group would be able to concentrate on its core competencies”, Duffner explained.

Aastra Technologies Ltd.

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