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Electronics Production | April 29, 2008

Digi acquires Sarian Systems

Digi has acquired Sarian Systems, a UK based company in the wireless router market.
The acquisition is a cash transaction for approximately $30.5 million for all the outstanding ordinary shares of Sarian. The purchase price of $30.5 million takes into account cash on Sarian's balance sheet as of the acquisition date, estimated to be $2.5 million.

Sarian Systems designs, develops and manufactures advanced wireless/cellular IP Routing equipment for mission critical applications. Having developed its own comprehensive IP operating system and software, Sarian delivers customers technical excellence, flexibility and rapid customization. Sarian has developed a strong customer base in ATM connectivity; retail and payment systems connectivity; remote monitoring or telemetry; lottery terminal connectivity; and wireless backup of wired broadband connections. This vertical focus is highly complementary to Digi's market approach.

"As we got to know the Sarian team and business, it quickly became apparent that this acquisition was a great fit on many levels," said Joe Dunsmore, Chairman, President and CEO of Digi. "We're acquiring a high-growth, profitable wireless business that can be expanded from Europe into other parts of the world. We have very similar corporate cultures and vertical go-to-market strategies, so integration will be straightforward. And with Sarian's strong European engineering and sales presence, we're immediately increasing the international content and capabilities of our business."

"With the great cultural and technical fit we see Digi as the ideal partner to take the fast growing business that we have in Europe, Scandinavia and Southern Africa into many other geographic regions," said Andrew Hood, Managing and Technical Director of Sarian. "Digi's market-leading Drop-in Networking technology and our flexible wired and wireless IP routing capability create a powerful global combination."

Digi expects Sarian to contribute in excess of $2.5 million in revenue for the third fiscal quarter of 2008, from date of acquisition, and in a range of approximately $3.5 to $5.5 million in revenue for the fourth fiscal quarter of 2008. Digi anticipates Sarian will contribute revenue in a range of $23 million to $27 million for fiscal year 2009.

Pursuant to the terms of the share purchase, Sarian became a wholly owned subsidiary of Digi International Ltd., located in the United Kingdom, a second tier subsidiary of Digi International Inc. Digi will retain the Sarian office in Ilkley, West Yorkshire, England.
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