On March 31st 2010, Kapsch CarrierCom AG successfully closed the deal to purchase Nortel’s assets relating to the EMEA and Taiwan GSM business as well as the global assets of Nortel’s GSM-R business. These Nortel divisions ideally complement the existing product portfolio of Kapsch CarrierCom and further extend the company’s global presence across four continents.
One of the largest Austrian technology acquisitions to take place during the past years closed on March 31st 2010. With the acquisition of parts of Nortel’s Carrier Networks Division, Kapsch CarrierCom transforms itself from a regional supplier focused on Central and Southeastern Europe, to a global GSM player. With immediate effect, Kapsch CarrierCom becomes the global market leader for GSM-R (Global System for Mobile Communications-Railway). The trust of the clients towards the new company was clearly proven by two further major orders. The French railways and the Algerian railways ANESRIF awarded orders that will be now executed by Kapsch CarrierCom.
“With this acquisition, a further company of the Kapsch Group becomes an international success story within a few, short years and also increases the value of Austria as a technology location. The Kapsch Group now has two world leaders. Firstly, Kapsch TrafficCom in the traffic telematic business and now secondly, Kapsch CarrierCom in the GSM-R business”, says Kari Kapsch, Member of the Kapsch Group Board of Directors, and also Kapsch CarrierCom’s CEO effective April 1st 2010. This acquisition is a ‘natural’ complement to the Kapsch CarrierCom portfolio following decades of co-operation with Nortel, and has extensive strategic significance for the company. The co-operation between Kapsch CarrierCom’s development team for the Nortel products and the newly acquired development centres provides the optimal prerequisites for the further development of the GSM portfolio, including the strategically important migration to future mobile technologies such as LTE. For GSM-R, in addition to the further development of core and access solutions, the emphasis will be applications. These applications will be offered as end-to-end solutions to the broad railway customer base. This will lead to a further expansion of the global GSM-R market leadership.
“One brand and one point of contact for innovative GSM and GSM-R solutions around the world. We cover the entire value chain, and consequently we are a total solution provider for the global GSM/GSM-R market. And that takes place using the Kapsch brand and at record speed”, explains Kari Kapsch. Following the closing of the acquisition, all products and solutions are offered using the Kapsch brand. Now Kapsch CarrierCom has subsidiaries and/or offices in 26 countries worldwide; for example in France, Germany, UK, Spain, Russia, China, Taiwan, Hong Kong and USA. The number of employees doubles from 330 to approximately 700 people. “This global focus poses a big challenge for the entire organisation, because suddenly the company doubles in size. Our close past co-operation with Nortel as well as the complementary focus of the acquired companies simplifies the integration immensely. From ‘Day 1’ we can act as a powerful group on the international market”, says Ingolf Planer, Kapsch CarrierCom’s CFO.
In addition to the worldwide assets, the acquisition also includes important GSM customer contracts with more than ten of the world’s largest international mobile operators, which together have more than 100 million GSM end-users. Well-known operators such as the French railway, the German railway as well as Network Rail UK belong to the customer base. “As the existing Nortel customers primarily benefit from this acquisition, for example from the boarder range of services, the customers have confirmed all large orders. This is a vote of confidence from our customers”, says Ingolf Planer. The trust of the clients towards the new company was clearly proven by two further major orders. Two orders were awarded that will be now executed by Kapsch CarrierCom. First, an order for GSM-R for roughly half of the French railway network. The largest PPP in France, Synerail, a consortium consisting of Vinci, SFR, TDF and Axa awarded this EUR 180M order. Secondly, the Algerian railway, ANESRIF, placed a EUR 40M order to implement GSM-R on 6 railway lines.
Kapsch CarrierCom is definitely focused on future growth. The forecasted revenues of the newly acquired companies will more than double Kapsch CarrierCom’s revenues in the next years. The broad base of installed GSM networks and the resulting maintenance and service contracts provide a good revenue base for the future. The GSM-R business is among the most future-oriented sectors. Several tenders, for example in Hungary, Poland, Turkey and Portugal are in the pipeline. Kapsch CarrierCom has excellent chances to win these projects due to the leading market position. Application development creates an interesting business unit for the company.
