TCM.L Regulatory News (TCM)

4 Apr 2005 08:00

Telit Communications PLC04 April 2005 Press Release 4 April 2005 Telit Communications plc ("Telit" or "the Company") First day of dealings on the Alternative Investment Market Telit Communications plc the global wireless communications developer anddistributor, today announces the commencement of dealings of its Ordinary Shareson the AIM market (AIM) of the London Stock Exchange plc. Seymour Pierce isacting as Nominated Adviser and Broker to the Company. The stock market EPIC isTCM.L Admission and Placing StatisticsPlacing price 140pNumber of Placing Shares to be issued 16,428,571Enlarged share capital immediately following Admission 43,214,281Market capitalisation at the Placing Price immediately following £60.5 million AdmissionGross proceeds of the Placing receivable by the Company £23 million Reasons for Admission to AIM and use of proceeds of the PlacingThe proceeds of the Placing of the New Ordinary Shares raised £23 million(before expenses) and will be used by the Company for further research anddevelopment, to strengthen the Company's sales and marketing function, forinvestment in fixed assets and to provide working capital for the Company. Oozi Cats, CEO of Telit Communications, said: "We are delighted that theflotation of the Company has been completed successfully and it is pleasing tosee such high levels of institutional demand for the shares. We now look forwardto using the funds raised from the flotation to increase our sales and marketingto take Telit to its next stage of growth." For further information:Telit Communications plcOozi Cats, Chief Executive Tel: +44 (0) 207 398 7700 www.telit.com Seymour Pierce LimitedStuart Lane, Corporate Finance Tel: +44 (0) 207 107 8000Sarah Wharry, Corporate Finance Tel: +44 (0) 207 107 8000stuartlane@seymourpierce.com www.seymourpierce.com Media enquiries:AbchurchJulian Bosdet / Chris Lane Tel: +44 (0) 207 398 7700julian.bosdet@abchurch-group.com www.abchurch-group.com Introduction Telit is an international business which specialises in the design and sale ofmobile telecommunications hardware. Telit operates in worldwide markets with itsprincipal operating business located in Trieste, Italy and Tel Aviv, Israel. Thebusiness has two distinct operating divisions. The first of these is the design,development, manufacture and sale of cellular wireless terminals for applicationin the machine-to-machine (m2m) communication market. The second is a brandedcellular terminal enhanced value-added reseller business, which customises anddistributes cellular handsets manufactured by third parties. These handsets aresold using the well known Telit brand. m2m communication is defined as automated communication between remote machinesand central management applications, or automated communication directly betweenremote machines. It provides real time monitoring and control without the needfor human intervention. The Company's data products for the m2m market are based on its proprietarytechnology and know-how developed in-house over many years. Telit builds itscellular engine with in-house designed hardware and software. The Company isable to provide its customers with an efficient product development cycle andwith flexible, customisable and cost effective solutions. E-principles, an m2m consultancy, predicts that the number of m2m connectionswill exceed the number of conventional wireless subscribers in North America,Western Europe and Japan by 2011. Similarly, the FocalPoint Group projects thatalmost 880 million new m2m-enabled modules will have been produced by 2010.Research from ABI is similarly optimistic. It suggests that the growth of m2mmodules will be 40 per cent per annum over the same period. Telit markets its m2m products in Italy, France, Germany, UK, Benelux, China,Brazil, Poland, Romania and Israel. The market for cellular phones is in a state of constant growth. Initially,creating new cellular subscribers fuelled the growth. Today, with over 1.5billion active cellular lines, the market growth is still expanding with newsubscribers in developing regions. The dynamics of the market now tend, however,to be more focused on the replacement cycles and future design, as well astechnology and features of next generation phones. There is a surge in cellular device replacements that utilise next generationcellular networks. The resultant swell of demand pushed the market to 34 percent growth during the first half of 2004 compared to the first half of 2003.Six cellular phone brands currently dominate the cellular handset market.However, Telit believes that cellular operators want to expand their sourcesbeyond the major brands to reduce their dependency on the large vendors. Marketanalysts predict growth in demand for non-branded handsets from 15.9 per cent(75million units) in the quarter 4, 2003 to 30 per cent (230 million units) in2007. Depending on the market dynamics of the geographical region, Telit eitherdistributes its products to cellular operators directly or through open marketwholesale and retail channels. In some regions where cellular operators controlthe cellular phone distribution via aggressive subsidy plans, the Company is,either directly or in conjunction with its local distributor partner, workingwith the cellular operators. In other regions where cellular operators do notoffer aggressive subsidies on phones, Telit works with a number of wholesale andretail stores in addition to working with the cellular operators to distributethe Company's products. Telit plans to build on its already established cellular phones markets inItaly, Israel, Mexico, Holland, Germany, Slovenia and Portugal as well astargeting new markets to achieve its growth. For the year ended 31 December 2004, Telit reported turnover of €75 million andhas 155 employees located in Europe (135 employees) and Israel (20 employees). DIRECTORS AND SENIOR MANAGEMENT Yitzhak Apeloig, Chairman, aged 46 From February 2001 until the end of 2004 Mr. Apeloig was the CEO of PolarInfrastructure Ltd. Prior to this, from January 1998 until February 2001, Mr.Apeloig was the vice president of finance and chief financial officer of PolarInvestments Ltd and from November 1994 to January 1998 Polar Investment Ltdcontroller and finance manager. Before Mr. Apeloig joined Polar, he was the vicepresident finance and chief financial officer of Magal Security Systems Ltd, apublicly traded company on NASDAQ, from November 1992 to November 1994. Duringhis career Mr. Apeloig has been involved in the management of different businessorganisations including in the field of telecommunications. Mr. Apeloig holds aBA in Economics and Accounting from Tel Aviv University and is a CertifiedPublic Accountant. Oozi Cats, Chief Executive Officer aged 43 Mr. Cats has 18 years of experience creating and leading business ventures. Mr.Cats co-founded the Group in 2000, and has managed it since its inception. From1994 to 1999 Mr. Cats founded and managed Auto Depot Ltd, the Israeli massmerchandising chain for vehicle supplies and services. From 1997 to 2002 Mr.Cats was a director at Hamashbir Mahsanei Ofna Ltd, an Israeli massmerchandising public company that is traded on the Tel Aviv Stock Exchange. Mr.Cats has studied at the University of Haifa. Inbal Barak-Etzion, Chief Financial Officer, aged 33 Ms. Barak Etzion has been Chief Financial Officer of the Group since January2002. Prior to this position, from 1999 to 2002, she was an executive of NewPharm Drugstores Ltd and April Cosmetics Chain Ltd, leading retailers with morethan 60 stores throughout Israel, where she held the position of Chief FinancialOfficer from 2000. Ms. Barak-Etzion holds a BA in Business Administration andAccounting from the College of Management Academic Studies located in RishonLeZion and she is a certified Public Accountant. She originally trained as anaccountant at KPMG in Israel. David Charles Denholm Hobley, Non Executive Director, aged 58 Mr. Hobley is a Fellow of the Institute of Chartered Accountants in England andWales, having qualified at Deloitte and subsequently employed at Coopers andLybrand Geneva. Since 1971, he has worked in investment banking firstly with SGWarburg & Co Ltd (later SBC Warburg) for some 25 years and then since 1998 withDeutsche Bank, London. In his banking career, he has undertaken significant M&Aassignments, provided advice to Central Banks and Governments and undertakenmany IPOs and privatisations. He is an independent director of Orange SA and ofseveral Orange group companies. Mr. Andrea Giorgio Mandel-Mantello, Non Executive Director, aged 46 Mr. Mandel-Mantello is the founding partner of AdviCorp PLC, a UK InvestmentBank regulated by the UK Financial Services Authority. Prior to his work atAdvicorp, Mr. Mandel Mantello spent 9 years at SBC Warburg ("SBCW" now known asUBS) in London in various senior management positions including ExecutiveDirector of SBC Warburg, member of the Board of SBC Warburg Italia SIM S.p.A,and Country Head for Israel. Prior to working at SBCW Mr. Mandel-Mantello spent2 years at Chemical Bank International Ltd. in London and 3 years at BancaNazionale dell'Agricoltura in Rome. Mr. Mandel-Mantello is a director ofCoraline S.p.A. a company which has recently acquired the business of FretteS.p.A. Italy's leading producer and retailer of Home Ware; he is a director ofMOTO S.p.A. a joint venture in the motorway restaurants business between CompassGroup PLC and Cremonini S.p.A.; he is a director of B.O.S. Better On LineSystems, a Nasdaq listed Israeli company involved in VoIP and enterprisesolutions. He holds a Bachelors degree in Economics and Political Science fromYale University. Senior Management Davidi Piamenta, aged 33 has been General Manager of the Branded EVAR Divisionsince the end of 2003. Prior to this Mr. Piamenta was COO of Dai Israel. Beforejoining Dai Israel he was the technical manager of Miniline Communications Ltd,a value added reseller of cellular handsets and accessories. Mr. Piamenta alsogained valuable experience in the Israeli Air Force technical division where heserved for 8 years. He holds a BA from Champlain University. Moti Elmaliach, aged 45, is the Chief Executive Officer of Dai Israel since July2003. He has over 17 years of experience in management, marketing and businessdevelopment. Prior to this position he was from 1998 to 2003 the CEO ofElgadphone Ltd, a subsidiary of Elgadcom Group with 320 employees, which is aleading Israeli telecommunications service integration company. He also servedas Elgadphone's VP Marketing & Business Development. From 1993 to 1997 he was atBezeq Call, a subsidiary of Bezeq Group, Israel's largest telephone andcommunication conglomerate, as manager of its Projects Department. Mr. Elmaliachholds a MBA in Business Development and a BA in Social Studies from Tel AvivUniversity. Dominikus Hierl, aged 37, has been General Manager of the Data Products Divisionsince September 2004. Prior to joining the Company, Mr. Hierl was the VicePresident for Business Development at Siemens AG, Wireless Modules, responsiblefor the strategy and business development of the Wireless Modules Division (oneof four divisions of Siemens Mobile) and a member of the management board of thedivision. During his six year tenure with Siemens, Mr. Hierl worked for SiemensWireless Modules as a manager in several sales and marketing roles. Prior toworking for Siemens, Mr. Hierl worked for 4 years for Rohde & Schwarz as salesmanager. He is a graduate of Fachhochschule Munchen in Electrical Engineering(Emphasis on Digital Electronics) and in Industrial Engineering. Yossi Moscovitz, aged 48, is the Chief Operating Officer of Dai Italy. Hisprevious role within Dai Italy was the head of the Data Products businessdivision. Prior to working for Dai Italy, Mr. Moscovitz was responsible for themanagement of the Data Products activity of Dai Israel. Before joining DaiIsrael he was the chief executive officer of Cell Data Ltd, an Israeli companyengaged in the development and sales of data products utilising CDMA technologyand the CEO of Microkim, an Israeli company operating in the field of wirelesscommunications. Mr. Moscovitz holds a B.Sc.EE from the Technion, Israel'sleading technological institute. Merav Zimerman, aged 39, has been the vice president of Marketing & Sales of theGroup since June 2001. Ms Zimmerman has 13 years of experience in branding andmarketing of consumer goods that she acquired through her backround as amarketing director of some of the leading Israeli consumer productsmanufacturers. From 1998-2001 she was the marketing director of the soft drinksdivision at Tempo Beer Industries one of Israel's leading suppliers of softdrinks and beer. Prior to this, from 1995-1998 she was a marketing director of"Gibor Sabrina" a world leader in womens underwear. Ms. Zimerman holds a BS inInternational Marketing and Trade from F.I.T. University in NYC. Copies of this document will be available to the public free of charge duringnormal business hours on any weekday (Saturdays, Sundays and public holidaysexcepted) from the offices of Seymour Pierce, Bucklersbury House, 3 QueenVictoria Street, London EC4N 8EL and at the registered office of the Company,110 Cannon Street, London EC4N 6AR, from the date of this document until onemonth from Admission. Notes to Editors: Dai Israel was founded in 2000 by Polar Investments Ltd. (formerly HapoalimInvestments Ltd), an Israeli investment house and Mr Oozi Cats, the ChiefExecutive Officer of the Group. Dai Israel is primarily engaged in sourcing CDMAcellular handsets and accessories, developing these handsets to meet itscustomers specifications and distributing them in the Israeli market. In 2004,Dai Israel achieved approximately 36% market share of the Israeli CDMA marketand approximately 12% market share of the entire Israeli handsets market. As part of its strategy to expand activities globally into the GSM/GPRS marketplace in order to build on its Israeli activities, Dai Italy was formed topurchase the assets and liabilities of an existing Italian business tradingunder the name "Telit". Telit's origins date back to 1986 as an engineering company selling research anddevelopment services, relating to the communications industry, to multinationalcompanies. It began manufacturing and marketing cellular handsets and othermobile communications devices, predominantly in Italy, under the "Telital" brandin 1997 and from 2000 under the now recognised Telit brand. Over the last fifteen years, Telit has been designing and producing advancedwireless network technologies. This has resulted today in Dai Italy owning aportfolio of valuable patents and possessing strong in-house technologiesincluding its own Protocol Stack and development expertise. The Company intends to continue the growth of its data products division bycapitalising further on the strong growth of the cellular m2m market. It alsointends to increase revenues from its Branded EVAR Division by building on theCompany's success in the Israeli and Italian markets, increasing the Company'smarket share in those existing markets and diversifying the business model intoother geographical regions where the Group is already setting up sales andmarketing operations. The Company operates in worldwide markets with its principal operating premiseslocated in Trieste, Italy and Tel Aviv, Israel. Following Admission, Telit Plcintends to establish its head office operations in the UK. The Data Products Division designs, develops, manufactures, markets and sells arange of data cellular communication products for the machine to machine ("m2m")market. The Company's technology and products enable other electronic devicesand equipment manufacturers to utilise the widely deployed GSM/GPRS cellularinfrastructure to relay and accept information without human intervention. Telitowns its own protocol stack and supplies A-Z solutions for the m2m market. The Branded Enhanced Value Added Reseller ("EVAR") Division customises anddistributes to mobile operators and to independent retailers, under therecognised brand "Telit", ODM's and OEM's cellular products, utilising itsextensive in-house research and development resources. m2m, or machine-to-machine wireless technology, is a new way of letting machinestalk to each other and letting them communicate with humans. M2m devices serveas a link between systems and machines, like computers and appliances, so thatthey can be controlled remotely. Most m2m modules are cellular radios withaccompanying functionality packaged in a slim form integrated into a largersystem. An example is a vending machine notifying a snack supplier that the unitis low on certain products. This information is provided by RNS The company news service from the London Stock Exchange