Siemens finds JV partner for enterprise comms biz

Siemens has announced that The Gores Group will acquire a 51 percent stake in its enterprise communications business Siemens Enterprise Communications (SEN). Siemens will retain a stake of 49 percent.

"We have been looking for an opportunity to expand our presence in the enterprise networking and communications space and this partnership with Siemens provides the perfect fit," noted Alec Gores, founder and chairman of Gores.

"We are continuing to intensify the focus of our portfolio on the three sectors, which are energy, industry and healthcare. In Gores, we have found an extremely experienced technology and telecommunications partner, who strengthens the business with the contribution of the two assets Enterasys and SER Solutions," said Joe Kaeser, Siemens chief financial officer. The deal of the joint venture is expected to close at the end of Siemens fiscal year 2008, pending regulatory approval.

Gores and Siemens plan to invest approximately 350 million euros ($544 million) in the joint venture—not including expenditures for R&D and other expenditures as part of the ordinary course of business. The investments will be made in order to launch innovative SEN products on the market, acquire other technology platforms to capitalize on the powerful SEN distribution organization and further drive the expansion and transition of the business from a hardware supplier to a software and service provider.

When the joint venture is launched, SEN business will also be supplemented and strengthened by combining the business with two of Gores' current portfolio companies—Enterasys, a network equipment and security solutions provider and SER Solutions, a call center software company. "Combining the three companies will lead to a more complete enterprise networking and communications offering that will leverage SEN powerful distribution capabilities, global reach and extensive customer base," stated Alec Gores.

On an operational level, business will be driven by Gores but the JV company will be entitled to continue using the Siemens brand. Key patents and licenses will be transferred to the joint venture. Production facilities in Leipzig, Germany, Curitiba, Brazil, Thessaloniki, Greece, will be transferred to the joint venture.