Funkwerk acquires Information Technologies division of Vossloh

1/12/2007, 1:25 PM (Source: GlobeNewswire)
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- Market position in information technology for railway companies
consolidated at international level
- Increase in product range and access to new international
customer groups
- Additional sales volume of around 40 mill. Euro

Kölleda, 11 January 2007. Funkwerk AG (ISIN: DE 0005753149), the
specialist in professional communication systems, is consolidating
its market position in information technology for railway companies
by taking over the "Information Technologies" division of Vossloh AG.
"Not only will this increase our market shares in Europe; as a
supplier we will also be able to reach a critical mass in many
product areas which will set us off even more distinctly from the
competition," stated Funkwerk Chairman of the Board, Dr. Hans
Grundner. Strategically, Funkwerk will use this acquisition to
increase its product range in the Traffic & Control Communication
segment and gain access to new customer groups in Europe,
specifically in Scandinavia and Great Britain.

The contract for the acquisition of Vossloh Information Technologies,
which consolidates the activities of Vossloh AG in the area of
information systems, was signed yesterday. The division will be
acquired free from debt for a provisional purchase price of 8 mill.
Euro. The purchase price is subject to adjustment depending on the
net working capital. The deal is contingent on the approval of the
Supervisory Board of Vossloh AG and the Federal Cartel Office.

Funkwerk assumes active role in market consolidation
The acquisition of Vossloh Information Technologies (VIT) will
provide the Thuringian-based technology group with a sales volume of
around 40 mill. Euro. In the consolidating market for information
technology for transport companies in Europe, Funkwerk will thus
assume an active role and be able to improve its competitive
The VIT segments "Planning and Simulation", "Operations Control
Systems" and "Signalling Technology" will further increase and
complement the current service offering of Funkwerk without overlaps.
Funkwerk will thus gain new know-how in the development of software
for the resource planning, the management systems and the signal
technology of transport companies at international level, while also
rounding off its system competence in operations control technology.
Since VIT addresses the same clientele as Funkwerk, the existing
customer base will increase by new international business relations.
"In the medium term, we expect to see signicant synergy effects here
in sales, development and production," announced Dr. Grundner.

In passenger information systems for local and long-distance rail
transport, Funkwerk will achieve a considerable consolidation of its
market position at European level, a crucial advantage in future
competition. Dr. Grundner: "Up to now, the market has been heavily
fragmented here. Due to the increasing networking, however, customers
seek a strong partner with a wide range of services and a high degree
of system competence, who can provide everything as a one-stop
solution, from the conceptual design right through to the
maintenance. We will in future be in an even better position to
demonstrate this and are confident it will benefit us in tenders at
both national and international level."

The individual operative subsidiaries of VIT in Germany, Great
Britain, Sweden, Poland and India are to be integrated into the
Traffic & Control Communication segment of Funkwerk. "Since we will
start with an identical technological platform, we do not foresee any
major obstacles for a successful integration," declared the Funkwerk
Chairman. "The incorporation into existing Funkwerk structures will
enable us to rationalise many of our processes. Thus, a large part of
our recent investment will be refinanced in the medium-term through
cost savings."

Additional earnings potentials through integration into Funkwerk
In the medium term, Dr. Grundner also believes further potential to
come from the possibility of complementing the product range of
Funkwerk. The VIT companies enjoy a good reputation in the sector,
with excellent references. This, according to the Funkwerk Chairman,
is clearly evident in the basic efficiency of the segments acquired.
"It is vital, of course, that we rigorously continue to intensify
this focus of Vossloh and concentrate on viable products and
profitable projects. Contrary to previously, the acquired company
will now form part of the core competences of a transport technology
group and no longer be a marginal business. We want to invest
specifically in these areas and hope that their integration into the
Funkwerk group will also stimulate the motivation of our employees.
We should then be able not only to restore our old earnings power,
but in future also to exceed it," said Dr. Grundner confidently.

Further information on Funkwerk AG:
Based in Kölleda near Erfurt, Funkwerk AG develops, produces and
markets professional communication systems used in vehicles,
transport and other companies and institutions. With its three
segments Traffic & Control Communication (communication, management
and information systems for transport and logistics companies),
Automotive Communication (communication equipment for vehicles) and
Enterprise Communication (personal security, messaging systems and
access solutions for companies and institutions), Funkwerk occupies a
strategically excellent position in future markets. With over 1,200
employees, the Thuringian technology group recently generated sales
of around 250 mill. Euro.

For further information contact

Funkwerk AG rw konzept GmbH
Im Funkwerk 5 Emil-Riedel-Straße 18
99625 Kölleda/Thuringia 80538 Munich
Germany Germany
Katrin Schwarz Sebastian Brunner
Investor Relations Tel: 0 89/13 95 96 -33
Telephone: 0 36 35/6 00 -3 35 Fax: 0 89/13 95 96 -34
Fax: 0 36 35/6 00 -3 99 Mobile: 01 75/5 60 46 73

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