New production facility for Telit M2M wireless

Bames and Telit have concluded a business alliance, which consists of a strategic manufacturing agreement and a 16 million Euro capital investment in the next-generation of Telit M2M modules

The international M2M specialist Telit Wireless Solutions and the leading global electronics service provider Bartolini After Market Electronics Services (Bames) have concluded a business alliance.

Bames is a former Italian subsidiary of Celestica, the world leader in the delivery of innovative electronics manufacturing services.

The business alliance consists of a strategic manufacturing agreement and a 16 million Euro capital investment by Bames.

Both agreements will enable Telit to continue the roll-out of its global strategy focusing on the rapidly-growing M2M market and consolidating its international expansion.

It will also help Telit to continue its activities developing next-generation M2M modules.

With this move, Bames is acknowledging the Telit commitment to the M2M market.

One key component of this alliance is a strategic manufacturing agreement with Services for Electronic Manufacturing (SEM), the electronics manufacturing subsidiary of Bames based in Vimercate, Italy.

SEM will completely take over the present and future production of the Telit M2M modules at competitive market prices for a term of not less than five years.

This will enable Telit to focus its European manufacturing in one geographical location.

In addition, it will streamline operations while keeping control of the intellectual property and increasing its control over its supply chain.

"We will benefit greatly from this agreement: Consolidating our manufacturing will help us to respond more efficiently to customer requests," says Dominikus Hierl, President Telit Wireless Solutions.

The agreement also involves a capital injection by Bames of 16 million Euro into the Telit M2M business.

Bames will provide Telit Wireless Solutions with 9 million Euro in equity and an additional 7 million Euro investment in equity in December 2008, providing Telit meets certain M2M module purchase milestones.

Telit will use this investment to further expand its research and development efforts.

"This once again demonstrates the Telit commitment to providing our customers with the most innovative, cost-effective solutions in the M2M market," stated Oozi Cats, Chief Executive Officer, Telit Communications.

The investment by Bames will also support Telit in maintaining its position as the main challenger on the global M2M market.

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