“From a regional company to the league of global players – this acquisition opens up entirely new perspectives not only for Kapsch CarrierCom but also for the entire Kapsch Group. The ‘new’ global headquarters also represent an upgrade of Vienna as a location for doing business. Vienna is striving to position itself as one of the world's leading locations for future industries – such as the field of technology – and is now one step closer to this goal,” says Kari Kapsch, Board Member of the Kapsch Group.

The newly acquired Nortel divisions ideally complement the existing product portfolio of Kapsch CarrierCom and further extend the company’s global presence. “The acquisition represents an absolutely logical step as it is unlikely that any other company knows this field of business as well as Kapsch CarrierCom,” explains Thomas Schöpf, COO Kapsch CarrierCom. There has been an intensive cooperation between Kapsch CarrierCom and Nortel for more than 25 years; since 1990, both companies have even developed vital GSM applications together. Numerous Nortel technologies and joint developments flowed into the solutions of Kapsch CarrierCom.

Kapsch CarrierCom takes over global top contracts
Apart from the global assets, the acquisition also includes important customer contracts with more than ten of the largest international mobile network operators with over 100 million GSM users, for example Orange in France and Slovakia, Bouyges Telecom in France and Chungwa Telecom in Taiwan. “These contracts and the numerous systems already installed by Nortel offer a huge potential for subsequent orders in the areas of maintenance and repairs,” says Ingolf Planer, CFO Kapsch CarrierCom. The company will also acquire important contracts in the GSM-R segment, such as for the French Railways (RFF/SNCF), German Railways (Deutsche Bahn) and NWR Network Rail UK. Measured in total railway kilometres, Kapsch CarrierCom now becomes the leading GSM-R provider in the world.

While Kapsch CarrierCom was before a regional operation with a strong focus on Central Europe, the company is now expanding its presence on four continents and also more than doubles the headcount of the GSM/GSM-R area. In Europe, the acquisition will allow Kapsch CarrierCom to strengthen its presence, particularly in the Western countries, where the main markets include France, Germany and the United Kingdom. On the African market, the company is now present in Algeria and Libya. Furthermore, in Asia Kapsch CarrierCom will be represented in Russia and Taiwan. The newly acquired GSM/GSM-R parts will be fully integrated into the corporate structure in order to make full use of the arising synergies.

Another important part of this acquisition is the development competency in Europe and the collaboration established over several years by Nortel with development centres in China, India and Russia. The combination of the existing Kapsch CarrierCom development team for Nortel products with the new development centres offers excellent opportunities for further development of the portfolio, including the strategically important migration to future mobile technologies such as LTE.

Acquisition leads to a doubling in the revenue
This acquisition will allow Kapsch CarrierCom to equip itself for further successful growth in the years and decades to come. For example, the forecast sales of the newly acquired assets will lead to doubling the revenue. The GSM-R segment will be one of the top future industries also in the coming years; moreover the GSM technology will continue to be intensively used in existing systems over the next three to five years. Through the broad base of installed systems, Kapsch CarrierCom will profit from maintenance and repair contracts. The acquisition is designed as an asset deal, with a total purchase price of USD 33 million in cash (without financial receivables) for Kapsch CarrierCom. The purchase was approved by the authorities in the USA and Canada on 2 December 2009; the consent of the French courts and the competition authorities is still pending.