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10 Oct 2011 - New Acquisition - NxGen Communications Pte Ltd

TeleChoice further strengthens its position to becoming a leading next generation Info-Comm Technology solutions provider with acquisition of NxGen Communications

-  Proposed $11.3 million acquisition of NxGen Communications Pte Ltd, a regional Infocomm provider of managed services and system integration solutions

-  TeleChoice’s ICT division targets further opportunities leveraging on the synergies of unified communications and cloud computing

SINGAPORE – 10 October 2011 – Main-Board listed TeleChoice International Limited (“TeleChoice”), a subsidiary of leading info-communications group, Singapore Technologies Telemedia Pte Ltd, wishes to announce that it has entered into a conditional sale and purchase agreement with the shareholders of NxGen Communications Ptd Ltd (“NxGen)”. Pursuant to the agreement, TeleChoice will acquire 100% of the share capital of NxGen in two tranches, comprising an aggregate of 600,000 ordinary shares for a total consideration of up to S$11.3 million. The consideration for the sale is subject to certain adjustments being made after an independent audit of the company’s financial statements.

NxGen, a Singapore incorporated company, is a regional info-comm provider of managed services and system integration solutions. Its core competencies in networking and unified communication solutions augment well with TeleChoice’s established position of offering its enterprise customers total solutions from IT infrastructure, business applications solutions to managed services and cloud computing solutions. NxGen’s in-house proprietary solution, ‘Smart View’ IP network management service and its range of other professional and consultancy services, combined with its IT outsourcing and regional capabilities have positioned the company as a major value-added player in the info-comm technology (ICT) services space.

Mr Andrew Loh, President of TeleChoice said, “The acquisition of NxGen, following our recent $18 million acquisition of integrated information technology solutions provider S & I Systems Pte Ltd, is another significant step we have taken towards reinforcing our market position to becoming a leading player in the ICT segment. NxGen’s healthy portfolio of clientele in the financial services, hospitality and other large industry segments, will also benefit the Group by offering us opportunities to cross-sell and upsell our services.”

Mr Steven Ng, Senior Vice President of TeleChoice’s ICT Services division said, “As a regional systems integrator and managed services provider for enterprise communications and contact centre solutions, NxGen will broaden our service offerings and market reach. It also offers new opportunities for us to pursue, leveraging on our existing voice and data network and cloud computing solutions. With this acquisition, our ICT division revenue will be over S$100 million and will provide us with the scale to compete even more effectively in the marketplace. The combined resources and capabilities supplemented with our management’s expertise and in-depth knowledge of the changing ICT industry is a significant advantage. We are moving with key industry trends and in particular the convergence of traditional IT services, networking and communications with the benefits of cloud computing will present new opportunities for us to differentiate and lead the market. Most importantly, customers can expect us to deliver fresh and innovative solutions and to offer a “next generation” approach to all their info-comm needs.”

Commenting on the outlook of the industry, Mr Ng added, “Cloud computing is complementary and has a natural synergy with the real time demand and highly distributed nature of unified communications. According to a research report[1], the hosted unified communications (which comprises solutions and/or services that offer voice, messaging, presence, mobility and conferencing capabilities that are accessible and managed through a single interface) and Telecom unified communications market is predicted to grow from US$2.8 billion in 2010 to US$5.5 billion in 2014 while the unified communications on-premise market is predicted to grow to US$1.4 billion in 2013.”

“TeleChoice recognised the potential in this growing market and with the acquisition of NxGen, we believe we are well-positioned to achieve our goal of becoming a leading next generation ICT solutions provider.”

Mr Gerald Ng, Executive Director of NxGen, said, “The investment of TeleChoice in NxGen represents a big leap for the organisation as we merge our technologies and capabilities with a strong provider of infocomm solutions in the enterprise space. We are proud to be a part of the ICT Services division and the TeleChoice Group. We are certain that TeleChoice’s reputation in the market will provide new growth and learning opportunities for NxGen.”

The proposed acquisition will be carried out in two tranches with the first tranche involving an aggregate of 330,000 NxGen shares and the second, involving the remaining 270,000 NxGen shares. TeleChoice intends to finance the acquisition through internal resources and borrowings. The acquisition will not have any impact on the share capital of TeleChoice.