| Austria

S&T Acquires Consulting Company IMG

Biggest Acquisition in the Company’s History

11 January 2007. Subject to the approval of the anti-trust authorities, S&T AG, the leading provider of IT services in Central and Eastern Europe, will purchase all shares in IMG Holding - The Information Management Group. The largest acquisition in the company’s history will enable S&T to strengthen and expand its core business area Business Solutions, enhance its portfolio of services and extend its geographic presence.
IMG "The Information Management Group" is an international consulting company headquartered in St. Gallen (Switzerland), which specialises in the implementation of innovative business models in processes and systems. At present the company has 653 employees at 27 subsidiaries in Central and Eastern Europe, Asia and the United States. In the financial year 2006* it generated revenues totalling CHF 130 million (EUR 81.6 million).

IMG was founded in 1989 as a St. Gallen University spin-off by professors Hubert Österle and Thomas Gutzwiller, and Tillmann Hüttenhain and is owned by its founders and employees. The Goldman Sachs Group and M2 Capital Management AG also hold significant interests in the company. According to Prof. Thomas A. Gutzwiller, Chairman of the Board of Directors The Information Management Group, "speed is an extremely crucial factor on our market. We were no longer able to optimally exploit the potential of the dynamic consultancy market with purely organic resources. The Management Board therefore systematically scanned the market for potential partners. After a careful evaluation process, S&T emerged as the ideal partner. "

S&T’s Consulting Services Continue to Grow
For S&T this represents the biggest takeover in the company’s history. "We are already the largest provider of IT services in Central and Eastern Europe. This takeover will hugely expand our lead, as IMG will strengthen our core business in our domestic markets of Central and Eastern Europe," says Christian Rosner, CEO of S&T AG. The two companies’ target industries "manufacturing" and "financial services" also overlap to a large extent. IMG specialises in providing services for an SAP environment. The group is therefore an ideal match for S&T which also has a strong focus on this area and is among the largest SAP consulting companies in Europe. Last but not least, the IMG subsidiaries in the exciting growth regions of Asia and the USA will increase the size of S&T’s geographic footprint. According to Rosner, "the successful integration of IMG will mean a great deal of work for our experienced acquisition team. But it will also create huge opportunities which we will make full use of. After this takeover, the market will look completely different – and S&T will have reinforced its claim to leadership. In future, there will be no way around S&T in the IT services market and especially in the SAP environment segment."

IMG Management Welcomes the Takeover
The management team at IMG will remain on board. Alfred Ermer, CEO of IMG AG, says, "The management of IMG welcomes and supports this takeover, as we firmly believe this development will offer employees, customers and partners advantages and potential for the future and will also provide the company with major global market synergies." Once the anti-trust authorities have given their approval, teams of managers and employees at the two companies will implement the merger and realise strategic and operational opportunities. The successful IMG brand will be preserved in most countries for the time being, and the two companies’ will continue to do business as in the past.

Customers Benefit
Both companies already focus strongly on customers in the manufacturing and financial services industries and possess detailed knowledge of the processes and operations in these sectors. Besides large and medium-sized national enterprises, the two corporations also count a large number of multi-national companies among their customers. Together IMG and S&T have more than 3,000 customers (including AOK, Bosch Rexroth, Andritz, Voest Alpine and Erste Bank). Under the heading Global Delivery, they will soon be able to call upon the services of an even stronger partner in even more countries. They will also benefit from the enhanced quality of consulting and implementation provided by multi-national teams and from the cost and efficiency advantages that the new company will offer.

Strengthening the Core Regions / Penetrating New Markets
With the acquisition of IMG, S&T is not only expanding its presence in Central and Eastern Europe; it is also extending its geographical footprint to Asia and the United States. IMG’s strong presence and excellent position on the markets in Germany, Switzerland, Austria and Poland will give new impetus to this S&T core region. S&T recently sold its Swiss subsidiary which had been purchased within the scope of another takeover, but whose service portfolio was not ideally suited to S&T. The company is now making a vigorous re-entry onto the Swiss market. In Germany, S&T has a small subsidiary which will achieve critical market size and gain importance as a result of the new constellation. Poland has been a key S&T market since 2000. "IMG will give us additional market strength in our core regions. The subsidiaries in Japan and China are also extremely interesting for us, as is the fact that we will gain a foothold in the US IT market," explained Rosner.

Expansion of the Consulting Business, especially in the SAP environment
IMG plans and implements business solutions focussing mainly on sales, customer service and the supply chain in the engineering industry, the retail trade, the processing, consumer goods and financial services industries. It therefore provides a perfect complement to S&T’s portfolio of services. The takeover will enable S&T to massively expand its core business area Business Solutions and will support the Group’s continued successful development. IMG has extensive experience and highly qualified workers especially in the area of SAP consulting. Together, the two companies have more than 1,200 SAP/ERP specialists. Rosner says, "this takeover immediately turns us into a key player in SAP services. S&T is now THE partner for all aspects of Business Solutions and consulting, especially in SAP/ERP."

The parties have agreed to keep details of the transaction confidential. S&T will not carry out a capital increase to finance the transaction. The transaction is subject to the approval of the anti-trust authorities.

* The IMG financial year ends on 30 September.