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Electronics Production | July 13, 2006

PKC Group acquires Canadian cable firm

Finland based Electronis and Wiring Harnesses specialist PKC Group has signed an agreement for the purchase of the business of Electro Canada Limited and the shares of Electro Canada SA de CV and Electro USA Inc.
Electro Canada Limited is a private company with over 40 years' experience in the manufacture of wiring harnesses for vehicles and electrical equipment. The acquisition includes a head office in Toronto, Canada, a wiring harness factory in Nogales, Mexico, and a sales office in Tucson, USA. The PKC Group will incorporate a new subsidiary that will continue Electro Canada's operations in Canada.

Electro Canada companies are owned by the same group of owners, although they are not consolidated into a single group. Currently the companies employ about 450 people. In 2005 Electro Canada Companies' net sales totalled EUR 22 million and earnings before interest and tax were EUR 1.5 million.

The acquisition brings a significant addition to PKC's customer base. Through acquisition, PKC Group becomes the main global supplier of wiring harnesses to Bombardier Recreational Products. BRP's products include Ski-Doo and Lynx snowmobiles, Sea-Doo watercraft and sport boats, Johnson and Evinrude outboard engines and Can-Am all-terrain vehicles (ATV or Quad) as well as Rotax engines.

PKC is already delivering wiring harnesses to BRP in Europe. PKC Group develops this cooperation in order to become a major supplier for BRP in wiring harnesses.

The North American operations and especially the factory in Mexico will enable the PKC Group to participate in competitive bids requiring worldwide services and to make deliveries to North American markets with short delivery times.

The purchase price is about EUR 9.5 million and the acquisition will be financed by internal funding and debt financing. No interest bearing liabilities will be transferred to PKC with the acquisition.

The final closing of the acquisition is contingent upon customary terms and conditions related mainly to the deal concerning Electro Canada's assets, which the seller and the buyer have to fulfil before 1 August 2006. The purchased business will be included in PKC's consolidated financial statements as of 1 August 2006. The acquisition is estimated to have a slightly negative impact on the PKC Group's earnings before interest and tax in 2006 due to transfers of production from Canada to Mexico and other arrangement costs.

"The acquisition strengthens significantly PKC's position as a global wiring harness supplier. By expanding to North America we are taking a major step in our growth strategy and the acquisition improves our position in competitive bids to current and new customers", says Mika Kari, President & CEO.

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