TES continues worldwide expansion with acquisition of Penang Manufacturing plant

Extended global footprint reinforces TES’s Custom Design and Manufacturing (CDM) presence

Langon-sur-Vilaine, October 2nd, 2006 - TES, the global electronics design and manufacturing services company, announces today a significant expansion of its worldwide presence through the acquisition of a manufacturing plant in Penang, Malaysia.

Alongside the existing plant at Langon, near Rennes, France, this new manufacturing resource ensures a balanced response to customer needs, and enhances TES’s delivery of innovative customer design and manufacturing (CDM) to OEM’s, technology and service industries.

“The acquisition of the Penang factory fulfills a commitment made when TES acquired the kernel of its business from Thales less than two years ago,” said Michel Desbard, CEO at TES. “We have been delivering on the promise to expand geographically and deliver global services through several design center acquisitions in India, US and Europe”.

The acquisition was made from AV Industries. TES partnered AVI one year ago and moved some equipment there from its plant in France and used the AVI facility to begin its Penang operation. The acquisition includes equipment and employees. It also includes the continued service to all AVI customers by TES.

TES will make investments in the facility to increase its capability and capacity to bring it to the standard of the existing plant in Langon. Initial investment will be in the range of EUR 1M. Results of this will be seen during first half of 2007 and will be a steadily increasing range of services from the Malaysian plant.

TES customers worldwide will see benefits from this new acquisition. It enables TES to offer blended engineering and manufacturing services and cost models to its customers. For example, there has been a massive migration of manufacturing to Asia from Europe. Small to mid-sized companies have not been able to access any benefit because the management cost is too high. TES’s extended global engineering and manufacturing footprint and additional capacity can now serve additional customers by front-ending manufacturing in Langon supported by increased capacity and capability with Penang.

Other advantages include the opportunity for TES’s European customers to service their Asian customers locally, and to have their Asian manufacturing totally managed by a European partner (TES). Asian customers will have access to local new product introductions and manufacturing, key complementary elements in TES’s Custom Design and Manufacturing (CDM) offer. American clients of TES , however, do not typically have their products manufactured in Europe and will benefit from the availability of a fulfillment end to TES’s CDM.

“The Penang acquisition enables TES to better deploy its CDM strategy in a global market,” said Nick Walker, Senior VP Sales and Marketing at TES. “The model has already been proven in Europe and this is a logical extension to take the model to a global level.”