Gores Group and Siemens AG Complete Transaction Creating Joint Venture

Siemens AG and The Gores Group, a U.S.-based private equity firm, have completed a joint venture transaction in which Gores acquired a 51 percent stake in Siemens Enterprise Communications. Siemens will maintain a 49 percent ownership interest in the joint venture. The joint venture will start operations on October 1, 2008.

Alec Gores, founder and chairman of The Gores Group, stated, “We are very excited about the addition of Siemens Enterprise Communications to our portfolio of companies. We think that Siemens Enterprise Communications will help expand our presence in the enterprise networking and communications space and we look forward to rapidly growing the joint venture.”

The Gores Group, which is focused to growing businesses, has extensive management expertise in the technology and telecommunications area and establishes the acquired companies as autonomous entities within their portfolio.

“The new partner will provide the leadership and experience to help grow the Siemens Enterprise Communications business and further consolidate the industry, which will benefit customers, employees and shareholders in the long term,” added Joe Kaeser, Siemens’ Chief Financial Officer.

As stated when the transaction was announced, Gores and Siemens plan to invest at least €350 million in the joint venture – not including expenditures for research and development and other expenditures as part of the ordinary course of business. The investments will be made in order to launch innovative Siemens Enterprise Communications products on the market, acquire other technology platforms to capitalize on the powerful Siemens Enterprise Communications distribution organization and further drive the expansion and transition of the business from a hardware supplier to a software and service provider.

Siemens Enterprise Communications’ innovative new products like the OpenScape UC Server will remain an integral part of the portfolio and it will continue to offer its OpenPath migration strategies for existing product families in order to ensure a smooth transition to the new Unified Communications solutions. Support and upgrades for Siemens Enterprise Communications products, especially HiPath 3000 and HiPath 4000, will also be continued.

In the coming months, Siemens Enterprise Communications business will be merged operationally with two of Gores’ portfolio companies – Enterasys, a network equipment and security solutions provider and SER Solutions, a call center software company. The combination of these three entities will lead to a more complete enterprise networking and communications offering. In the near term, Siemens Enterprise Communications will be led by Chairman and interim CEO Mark Stone.

“With the closing and the creation of this new entity, we believe the stage is set for this company to become one of the top global players in unified communications with products, services and people that are second to none in the industry,” said Mr. Stone. “Furthermore, we believe the time is right for this new company to experience phenomenal growth, both organically and through acquisitions, and position itself as a major force in the market.”