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Flextronics Completes Acquisition of Majority Stake in Hughes Software Systems

Posted on: Tuesday, 19 October 2004, 16:00 CDT

SINGAPORE and NEW DELHI, India, Oct. 19 /PRNewswire-FirstCall/ -- Flextronics , today announced that it has completed the acquisition of 70% of the outstanding shares of Hughes Software Systems , a leading provider of software products and services to telecom infrastructure companies. Approximately 55% of the outstanding shares were acquired from Hughes Network Systems, and approximately 15% were acquired in an open offer that was completed today.

Flextronics has paid approximately US$226.5 million to Hughes Network Systems, Inc., a wholly-owned subsidiary of The DIRECTTV Group, Inc. , for its ownership stake in HSS and approximately US$62.5 million to the shareholders of HSS who participated in the open offer made by Flextronics in accordance with Indian securities regulations.

The addition of HSS products and services makes Flextronics the first EMS company to offer convergent software solutions to fixed and mobile networks for both voice and data.

"With today's HSS acquisition, we now have all the pieces in place to provide a competitively superior, end-to-end outsourcing solution to telecom companies," said Michael E. Marks, chief executive officer of Flextronics. He added, "The addition of world-class software design services from HSS is an important piece of Flextronics' strategy to play a design role in all of the products we manufacture. We could not be more thrilled and we welcome the talented HSS team to our company."

"We are very excited to officially join the Flextronics team and to extend the company's range of design, build and ship capabilities to our customers, which include many of the world's largest telecom companies," stated Arun Kumar, President and Managing Director of HSS. "We look forward to growing with the Flextronics team."

About Flextronics

Headquartered in Singapore, Flextronics is the leading Electronics Manufacturing Services (EMS) provider focused on delivering operational services to technology companies. With fiscal year 2004 revenues of USD$14.5 billion, Flextronics is a major global operating company with design, engineering, manufacturing, and logistics operations in 32 countries and five continents. This global presence allows for manufacturing excellence through a network of facilities situated in key markets and geographies that provide customers with the resources, technology, and capacity to optimize their operations. Flextronics' ability to provide end-to-end operational services that include innovative product design, test solutions, manufacturing, IT expertise, network services, and logistics has established the Company as the leading EMS provider. For more information, please visit http://www.flextronics.com/.

About DIRECTV

The DIRECTV Group, Inc. is a world-leading provider of digital multichannel television entertainment, and broadband satellite networks and services, and global video and data broadcasting. The DIRECTV Group, Inc. is 34 percent owned by Fox Entertainment Group, which is approximately 82 percent owned by The News Corporation Ltd.

About Hughes Software Systems (HSS)

Hughes Software Systems is an end-to-end communication solutions provider of software products and services to more than 250 customers worldwide in the telecom domain. Assessed at SEI-CMMI Level 5, HSS has been an ISO 9001 company since 1996. Development centers are located in Gurgaon and Bangalore, India, and Nuremberg, Germany. HSS has sales and support operations in 10 international locations and has approximately 2400 employees worldwide. HSS has won many awards, including: 2002 Internet Telephony Product of the Year (SIP Server Framework), 2002 Top 10 most respected IT companies in India (Business World), 2003 Communications Solutions Product of the Year (SIP Server Framework), 2003 Top 25 Indian company for excellence in corporate governance (ICSI) and 2003 featured company on best employers list for second year in a row (Business Today/Hewitt Associates). For more information, please visit http://www.hssworld.com/.

This new release includes "forward-looking statements" within the meaning of federal securities laws and is subject to the safe harbor under those laws. Such statements include statements expressing or implying the anticipated benefits of the transaction for Flextronics, HSS and their customers. The results of the matters described or implied in this release could differ materially from that discussed or implied. Factors that could contribute to such differences include, but are not limited to, fluctuations in demand for HSS products and services, the risks that Flextronics and HSS may not succeed in cross-marketing their products and services, the risk that HSS may not retain its engineers or other key employees or retain business with key customers, general economic and business conditions, competition, factors affecting the industries in which Flextronics and HSS operate, and other factors described under "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Risk Factors" in Flextronics' most recent Annual Report on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K filed with the Securities and Exchange Commission which are incorporated herein by this reference. Any forward-looking statement speaks only as of the date on which such statement was made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement was made, or to reflect the occurrence of unanticipated events.

Flextronics

CONTACT: Thomas J. Smach, Senior Vice President of Finance,+1-408-576-7722, or investor_relations@flextronics.com, or Renee Brotherton,Senior Director of Corporate Marketing, +1-408-576-7189, orrenee.brotherton@flextronics.com, both of Flextronics

Web site: http://www.hssworld.com/

Web site: http://www.flextronics.com/

Source: PRNewswire-FirstCall

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