Eltel buys out its JV partner in Norway

Eltel has agreed to acquire the other half of the JV Eltel Sønnico AS in Norway
from its partner Umoe at a price of NOK 265 million. The JV was formed in the
beginning of 2014 to join the communication businesses of Eltel and Umoe in
Norway. After this acquisition Eltel will be the sole owner of the company.
The joint venture of the communication businesses of Eltel and Umoe´s Sønnico
Tele AS was agreed in Q1 2014 and started operations in the beginning of 2015.
All other Eltel businesses in Norway are operated within Eltel Networks AS, a
wholly-owned subsidiary of Eltel Group. In the end of 2014 Eltel Sønnico won a
large framework agreement with Telenor in maintenance and build of fixed and
mobile communications for five years. The driver that formed the JV between
Eltel and Sønnico was the rapidly changing Norwegian telecom industry. Telecom
operators have been exploring different options to improve cost efficiency
requiring that their service providers should take over larger responsibilities
for their value chain. An increased production capacity and a wider geographical
coverage enabled the JV to meet such requirements. With Eltel becoming the sole
owner of the JV, the governance of the company will be aligned with Eltel’s
group structure, organization by specialized business units and implementation
of Eltel’s operational model, Eltel Way. Hence the integration of the company
with Eltel both within Norway and internationally will be enhanced.

The price of NOK 265 million will be paid in cash. The price is in line with
Eltel's stated target range for acquisitions of 5-7 times EBITA measured
proforma for the last 12 months. 2/3 of the price will be paid at closing and
the remaining 1/3 will be paid in January 2016. Eltel's net sales will increase
with the full amount of the JV's net sales, slightly below EUR 200 million per
annum, while net profit will increase with the Umoe 50% of the total JV net
profit. The impact on Eltel’s operative EBITA-margin will be negative by 0.30
-0.35 %-points, should the JV have been fully consolidated in Eltel 2015. The
acquisition will be EPS accretive immediately at closing.

Eltel Networks AS has, in a short time become a major implementation partner of
railway projects in Norway. In the spring of 2015 the company has also won smart
metering projects for Hafslund and Skagerak establishing a market leading
position in Norway with over 800,000 meter installations by 2019. Furthermore,
Eltel is implementing power transmission projects both for power and rail
operators in Norway. The acquisition is subject to the approval of the Norwegian
Competition Authority.

Axel Hjärne, CEO Eltel Group comments:
“We are very happy to acquire the shares held by Umoe in Eltel Sønnico AS and
thereby fully consolidate this entity within the Eltel group. A full ownership
of the communication business in Norway will let us combine it with our power
and rail businesses in Norway and will help us optimize our support functions in
the country. Our overall pool of competencies will be much larger after the
merger, providing more opportunities for employees and a more resourceful
Infranet services partner for our Norwegian customers. The acquisition of Eltel
Sønnico shares is in line with Eltel’s growth strategy and aligned with the
medium and long term financial targets of the company”.

About Eltel Sønnico AS
Eltel Sonnico AS was established in March 2014 as 50/50 JV between Eltel Group
and Umoe Group in the communication business. The company signed a five year
contract with Telenor in Q3 2014 and started operations in January 2015. The
company has 1,100 employees and net sales of approximately NOK 1,700 million per
annum.

About Eltel
Eltel is a leading European provider of technical services for critical
infrastructure networks – Infranets – in the segments of Power, Communication
and Transport & Defence, with operations throughout the Nordic and Baltic
regions, Poland, Germany, the United Kingdom and Africa. Eltel provides a broad
and integrated range of services, spanning from maintenance and upgrade services
to project deliveries. Eltel has a diverse contract portfolio and a loyal and
growing customer base of large network owners. The number of employees is
approximately 8,600 and in 2014, Eltel net sales amounted to EUR 1,242 million.
Eltel’s share is listed on Nasdaq Stockholm since February 2015.

For more information, please contact:
Gunilla Wikman, Investor Relations Manager at Eltel AB
Tel: +46 72 5843630 gunilla.wikman@eltelnetworks.se

Hannu Tynkkynen, Senior Vice President, Group Communications at Eltel AB
Tel: +358 40 3114503 hannu.tynkkynen@eltelnetworks.com

For questions directed to Umoe; please contact:
Espen Klitzing, Group CFO Umoe AS tel: +47 92826166

This is information that Eltel AB (publ) is required to publish in accordance
with the Swedish Securities Markets Act and/or the Swedish” Financial Trading
Act. This information was submitted for publication on 10 August 2015 at 8.00
CET.