Lagercrantz acquires K&K in Finland

Lagercrantz Group AB has concluded an agreement to acquire all shares outstanding in K&K Active Oy and K&K Sales Oy. Three private individuals are the sellers. K&K Active is a value-adding distributor of systems and components in the field of telecommunications systems and for access networks. The company has been active since 1994 and has displayed good earnings generation capability and strong revenue growth for a long time. During 2005 the company had revenues of MEUR 4.3 with operating earnings of MEUR 1.0. The company has 11 employees. Aided by good product knowledge, strong suppliers, efficient logistics and technical support, the company has built a strong market position in selected niches. The customer base is comprised mostly of telecommunication and broadband operators. In a comment, Jörgen Wigh, President & CEO of Lagercrantz Group, states as follows on the acquisition: "K&K Active is an interesting addition to Lagercrantz Group. The company and its owners, who will remain with the company, have very successfully built a strong position for K&K Active thanks to technical foresight and delivery of customer benefit." As a part of the transaction the company K&K Sales Oy will also be acquired. K&K Sales' business consists of sales of fibre-optic splicers and cables. In 2005 the company had sales of MEUR 0.7 with operating earnings just short of MEUR 0.2. The purchase money for the businesses in K&K Active and K&K Sales amounts to MEUR 3.35, plus compensation for the companies' net cash position. Additional purchase money may be payable based on earnings achieved over and above a threshold value of close to MEUR 0.7 per year over a three-year period. The acquisitions are expected to generate a positive increment to earnings per share during the current financial year. The companies will be part of division Communications from 1 November 2006.