Wärtsilä strengthens its position in automation and electrical systems by acquiring L-3 Marine Systems International

Wärtsilä Corporation, Company announcement, 16 December 2014 at 13.00 EET

Wärtsilä strengthens its position in automation and electrical systems by
acquiring L-3 Marine Systems International

Wärtsilä Corporation is to acquire L-3 Marine Systems International from NYSE-
listed L-3 Communications Holdings Inc. L-3 Marine Systems International (L-3
MSI) is a business sector within L-3's Electronic Systems business segment
primarily focused on the commercial ship industry. The transaction is valued at
MEUR 285 (enterprise value), subject to customary adjustments including an
estimated reduction of MEUR 60 for L-3 MSI employee pension-related liabilities
to be assumed by Wärtsilä Corporation. Financing for the deal will be from
existing cash resources and credit facilities. The acquisition is subject to
clearance from the regulatory authorities. The acquisition is expected to be
closed during the second quarter of 2015.

L-3 MSI is expected to generate approximately MEUR 400 of sales with an
operating margin of approximately 6.5 % for the year ending 31 December 2014.
Headquartered in Hamburg, Germany, L-3 MSI currently has more than 1,700
employees in 38 locations in 14 countries. The company is well regarded
internationally for its technology and systems integration capabilities. L-3 MSI
delivers automation, navigation and electrical systems, as well as dynamic
positioning technology, and sonar and underwater communications technology for
the marine, naval and offshore markets. It has a leading position in the cruise
& ferry and large container vessel markets. L-3 MSI's portfolio comprises
various product brands, including SAM Electronics, L-3 Valmarine, Lyngsø Marine,
L-3 Dynamic Positioning & Control Systems, Jovyatlas Euroatlas, L-3 Elac Nautik,
Funa and APSS.

The operation of vessels is becoming ever more sophisticated and the number of
ships with electric propulsion is increasing. This trend is expected to continue
because of the growing needs for flexibility, compliance with environmental
regulations, and higher operational efficiency. Wärtsilä has a strong position
in all of these areas, which will be further strengthened by its acquisition of
L-3 MSI. L-3 MSI has extensive experience in supplying a variety of vessel and
offshore installation types. Combining this strength with Wärtsilä's engines,
propulsion equipment, environmental offering, gas fuel solutions, and electrical
& automation systems creates a unique offering that is unmatched by the
competition. Both shipyards and owners serving the marine and offshore oil & gas
sectors will benefit from this alliance.

In announcing the acquisition agreement, Mr Jaakko Eskola, Senior Executive Vice
President & President, Ship Power, Wärtsilä Corporation commented: "By combining
forces with L-3 MSI, we create a powerful electrical and automation business,
which is unique in its sector competence and breadth of capabilities. The deal
is fully in line with our growth strategy to become the leading provider of
innovative products and integrated solutions in the marine and oil & gas
industries. This enables us to have a dedicated focus on both markets with an
industry leading portfolio that features solutions from both companies."

Wärtsilä foresees that the new unit will be able to capture new market
opportunities and improve operational efficiency for its customers, thereby
increasing both the sales and profitability of the business. The acquisition is
expected to be EPS accretive as of 2015.


ANALYST AND PRESS CONFERENCE AT 15.00 EET


An analyst and press conference will be held on Tuesday 16 December 2014 at
15.00 Finnish time, at the Wärtsilä headquarters in Helsinki, Finland. The
combined web- and teleconference will be held in English and can be viewed at
the following address:
http://wcc.webeventservices.com/r.htm?e=896067&s=1&k=E073A555DDDE0FF79B2C9F3C84E
DA9AA

To participate in the teleconference please register at the following address:
http://emea.directeventreg.com/registration/47536672 . You will receive dial-in
details by e-mail once you have registered. If problems occur, please press *0
for operator assistance. Please use *6 to mute your phone during the
teleconference and the same code to unmute.


An on-demand version of the webcast will be available on the company website
later the same day.


Media contacts:


Jaakko Eskola
Senior Executive Vice President & President, Ship Power
Wärtsilä Corporation
+358 10 709 5623
jaakko.eskola@wartsila.com


Atte Palomäki
Executive Vice President, Communications & Branding
Wärtsilä Corporation
Tel. +358 10 709 5599
atte.palomaki@wartsila.com

For investor information, please contact:
Natalia Valtasaari
Director, Investor Relations
Wärtsilä Corporation
Tel: +358 10 709 5637
natalia.valtasaari@wartsila.com



Wärtsilä in brief:


Wärtsilä is a global leader in complete lifecycle power solutions for the marine
and energy markets. By emphasising technological innovation and total
efficiency, Wärtsilä maximizes the environmental and economic performance of the
vessels and power plants of its customers.


In 2013, Wärtsilä's net sales totalled EUR 4.7 billion with approximately
18,700 employees. The company has operations in more than 200 locations in
nearly 70 countries around the world. Wärtsilä is listed on the NASDAQ OMX
Helsinki, Finland.


www.wartsila.com


L-3 MSI in brief:

Headquartered in Hamburg, Germany, L-3 Marine Systems International (L-3 MSI) is
a sector within L-3's Electronic Systems business segment. L-3 MSI is a turnkey
supplier of complete electrical systems, as well as integrated navigation,
automation, communications, energy distribution and propulsion systems for all
types of ships. L-3 MSI has 1,700 employees in 38 locations and 14 countries. L-
3 MSI is expected to generate approximately MEUR 400 of sales with an operating
margin of approximately 6.5 % for the year ending 31 December 2014. L-3 MSI is
part of the Marine & Power Systems Division of NYSE-listed L-3 Communications
Holdings Inc.


Headquartered in New York City, L-3 Communications Holdings Inc employs
approximately 48,000 people worldwide and is a prime contractor in aerospace
systems and national security solutions. L-3 is also a leading provider of a
broad range of communication and electronic systems and products used on
military and commercial platforms. The company reported 2013 sales of $12.6
billion. To learn more about L-3, please visit the company's website at www.L-
3com.com.


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