Dii Group to Acquire Ascom Manufacturing Facility - Company Business and Marketing

Cambridge Telcom Report, Jan 17, 2000

The Dii Group, Inc. and Ascom Business Systems AG, a wholly owned subsidiary of Ascom Holding AG, Wednesday announced that they have signed a memorandum of understanding in which the Dii Group, through its wholly owned subsidiary, Dovatron International, Inc., will purchase Ascom's manufacturing facility and related assets in Solothurn, Switzerland. The 400,000-sq. ft. Solothurn plant employs about 550 people and is responsible for the production of private branch exchanges (PBX equipment) and phone terminals, including DECT, ISDN and GSM satellite telephones. A long-term supply agreement, in which Dovatron will supply printed circuit board assembly, box build, and various engineering support services, is included in the agreement between the two companies. This activity is expected to provide revenues to the Dii Group in excess of $180 million annually. Other terms of the deal are not being disclosed at this time.

Ernst Zwahlen, chief executive officer of Ascom Business Systems AG, stated: "Because of Dii-Dovatron's professionalism, customer orientation and electronics manufacturing expertise, we are confident in expanding our long-standing relationship with them. This arrangement allows us to focus on our strengths and core activities, while Dii-Dovatron focuses on its well-honed manufacturing and logistics competencies. In addition, our Solothurn team will enhance Dii-Dovatron's telecom capabilities with expanded RF expertise, dedicated design and engineering capabilities, and extensive market knowledge in Europe."

Micheal Corkery, president of the Dii Group Europe, commented: "We have been a long-time supplier to Ascom through our Malaysian facility, and are delighted to extend this relationship further. Ascom's PBX, ISDN and DECT product lines that we will produce for them in Solothurn are leaders in the marketplace. This partnership will enhance Ascom's strong market position in the growing worldwide telecom market by utilizing Dovatron's manufacturing and logistics expertise, while providing an opportunity for Multek China to provide the related printed circuit boards."

Corkery continued, "The Ascom team at Solothurn is a highly talented group of people, and we are delighted to have them join our company. Their telecom skills will be very valuable, adding further depth to Dovatron's manufacturing capabilities."

On November 22, 1999, the Dii Group, Inc., and Flextronics International Ltd. announced that they had signed a definitive agreement for a tax-free, stock-for-stock merger. Each Dii shareholder will receive 1.61 Flextronics ordinary shares for each Dii common share on the merger date, which is targeted for early April. Flextronics International Ltd. will be the name of the combined organization.

Ascom is an internationally active Swiss telecommunications and service automation group with more than 11,000 employees worldwide. Ascom's market offerings comprise network integration and service management, network access/last mile including Powerline Communications, security and encryption, telecommunications systems/terminals including mobile applications, power supply systems, transport revenue systems including electronic ticketing, cash handling and smart card applications. Ascom is a system integrator and solution provider with good customer relations, broad technological expertise including man-machine interfaces and design, innovativeness and a company size that allows maximum flexibility. The company has a strong local market presence in Europe, Asia and North America.

The Dii Group, Inc. is a leading, value-added electronics design and manufacturing service provider, which operates through a global network of companies in North America, South America, Europe, and Asia. The company serves the electronics industry through its core competencies: design and semiconductor services; printed circuit boards; and systems assembly and distribution, which includes circuit board assembly, box build, and repair services. The Dii Group employs more than 12,000 people and had revenues of $926 million in fiscal 1998. Its Internet (Web) Site can be reached by accessing www.diigroup.com.