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28 January 2009
The Reply Group will create an M2M (machine-to-machine) research and development centre in Turin based on existing skills and facilities. The acquisition agreement is structured as follows: • Reply will acquire Motorola’s Turin Centre branch, which currently consists of 339 employees, 20.6 million euros in cash assets and 3.0 million euros in other assets. • Reply’s new research centre will have access to public financing subsidies of up to 20 million euros, plus at least 5 million euros in financing at low interest rates. Reply [REY,MI], a leader in the design and implementation of solutions based on new communications channels and digital media, announced today that it has signed an agreement to acquire Motorola’s Turin research centre. Using existing skills and facilities, the Reply Group will set up a research and development centre in the field of M2M (machine-to-machine) technology in Turin. M2M is a combination of hardware and software aimed at information exchange and interaction between networked devices for automating mission critical processes. The Motorola research centre acquisition agreement fits perfectly into Reply’s four-pronged development strategy – networks of processes, people, services and objects. M2M, the basis for the Internet of objects, is currently worth 230 million euros (*) in Italy. Analysts estimate that this will grow by about 20% (*) per year between 2008 and 2011. Globally, M2M business is expected to total 220 billion euros (**) in 2010, with an annual growth rate of 50% (**). The aim of Reply’s new research centre is to create a platform of services, devices and middleware to support specific vertical applications such as infomobility, advanced logistics, environmental safety, contactless payment and product traceability. The new research centre allows Reply to round out its offering through the ability to design integrated hardware and software solutions, enabling the Group to strengthen its position in the markets where it operates (Telco-Media-Utilities, Banking and Insurance, Industry and Services, Health and Public Administration). The region of Piedmont will provide up to 10 million euros in subsidies for R&D at the Reply research centre. The Ministero dello Sviluppo Economico (Ministry for Economic Development for SMEs), which is managed by the region of Piedmont, will also add up to a maximum of 15 million euros. The details of the transaction call for the purchase of the Motorola branch by Reply for a symbolic amount. Currently the Motorola research centre consists of 339 employees, 20.6 million euros in cash assets and 3 million euros in other assets. An agreement has been reached and signed by union representatives ensuring that 180 of the current 339 Motorola employees will retain their jobs at the new Reply research centre. A mobility programme is planned for the other employees, which includes a commitment by local authorities to help them find new employment. “Reply intends to become a key player in M2M and related services,” said Mario Rizzante, Chairman of Reply. “This is a double-digit growth sector that, in the next few years, will play a fundamental role in the diffusion of new technologies in business and everyday life”. He went on to say, “With the agreement to purchase the Motorola research centre in Turin, our Group will acquire excellence in the development of mobile devices, end-to-end testing and embedded systems. The new capacity to design and engineer M2M platforms will increase Reply’s medium and long-term competitiveness”. Rizzante closed by saying, “With this operation, Reply confirms its commitment to the development of the region in cooperation with local authorities and the Polytechnic, making ICT a leading area of innovation for Piedmont”. (*) analysis and estimate by NetConsulting (**) analysis and estimate by IDATE