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Investment agreement between ATM S.A. and KLK Technologie Informatyczne Sp. z o.o.

On October 24, 2006, the companies ATM S.A. and KLK Technologie Informatyczne Sp. z o.o. signed an investment agreement for acquisition by ATM an interest in KLK from the existing shareholders. In result of this transaction, ATM is to acquire almost 80% of the KLK stock.

ATM will pay for 45% of the purchased stock price in cash and for the remaining 55% by its newly issued shares. The remaining KLK stock will be kept by the existing shareholders who seat in the company Executive Board.

KLK Technologie Informatyczne Sp. z o.o. is a provider of advanced IT services and one of the longest-operating IT system integrators in Poland. The company focuses on consulting, design, deployment, and maintenance services in the area of advanced power-supply systems, telecommunication networks, and computer systems. KLK is a company with an excellent reputation in its region, but it operates all over Poland. It has been achieving a stable growth rate and regular good bottom lines. In 2005, the company sales were PLN 40 million and its net profit exceeded PLN 1.8 million.

The executive boards of both companies are convinced that KLK has real chances to improve its growth rate thanks to the cooperation with ATM.

The acquisition of KLK stock conforms to the ATM S.A. development strategy which aims to strengthen the company position by consolidation of ICT (Information & Communication Technology) firms. ATM S.A. has selected KLK due to the following considerations:

  • The products offered by both companies are fully complementary and the KLK competencies supplement and enrich the ATM offer in certain important areas of ICT system integration.
  • The KLK’s market position enables ATM to offer products to customers from the SMB (small and medium-size business) sector, which will lead to an increase of the company sales, particularly in the area of telecommunication and maintenance services provided by ATM Services.
  • Both KLK and the Katowice branch of ATM have a good reputation on the local market. Their close cooperation will enable a further strengthening of the ATM Capital Group’s role in Upper Silesia which ATM believes is a region with a large development potential.
  • The technological support provided by ATM will enable KLK to increase its growth rate and achieve even better financial results.
  • KLK is an unquestionable leader on the uninterruptible power supply market, which will enable ATM to strengthen its offer in the area of design and deployment of BCP (Business Continuity Planning) solutions, among others for financial institutions and telecommunication operators.
  • KLK has a good position in the financial and power-industry sectors which are also very important markets for solutions offered by ATM.

The markets on which both companies operate have a large growth potential, particularly in the context of combined competencies of the two entities.

Another benefit from the planned transaction is also strengthening the companies’ position against IT hardware providers. The close cooperation of both companies will enable improvement of the offer of both ATM and KLK, as will as offering a portfolio of complementary products.

An additional factor which facilitates the transaction is the fact that the two companies share similar organizational and technological cultures. The investment agreement provides that the key KLK managers will remain at their positions. As a proof of their conviction of the successful merger of both companies, they have accepted that the KLK stock will by partially paid for by ATM shares which they treat as a long-term investment.

In result of the planned transaction, the ATM Capital Group will significantly strengthen its position on the Polish IT market. The investment agreement provides that the contract for purchasing the interest of KLK Technologie Informatyczne Sp. z o.o. by ATM S.A. must be concluded not later than on November 15, 2005.

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