The boards of directors of Incap Corporation and JMC Tools Oy have signed an agreement on the merger of the two companies’ business operations in accordance with the letter of intent signed on 4 January 2002. The goal of this merger is to establish a strong and competitive technology company, whose operating concept will result in a broader service offering to the current customers and comprehensive and profound expertise in the ICT sector (Information and Communication Technology, ICT), especially in the network systems of wireless communication.

The merger will be carried out as an exchange of shares, whereby the shareholders of JMC Tools Oy will receive shares of Incap Corporation from a directed share issue. In accordance with the merger agreement, the shareholders of JMC Tools Oy will ultimately own 70 % of the shares and voting rights of the merged company.

Contrary to previous information, Incap Corporation’s ordinary annual general meeting will be held on Thursday, 21 March 2002, starting at 11.00 a.m. in the Iceland Hall of Radisson SAS Royal hotel at Runeberginkatu 2, Helsinki. In addition to discussing the normal issues on the agenda of an ordinary annual general meeting, the meeting will also discuss increasing the share capital to carry out the exchange of shares, the issue of shares to the shareholders of JMC Tools as well as some amendments of technical nature to the company’s articles of association. Further, the meeting will discuss the proposal to grant the board of directors an authorization to decide upon an increase of the share capital of the company through issue of new shares, issue of warrants or convertible loans. A separate release will be published on the annual general meeting.



The merged company will serve its customers with an integrated product and service concept, which combines mechanical and electronic expertise. The company’s R&D units will search for new solutions and technologies to improve the qualities of the products manufactured by the company.

The company will design, manufacture and deliver subassemblies and box-build products containing electronic and sheet-metal components, such as mechanical components for high-frequency base station filters and mast-top amplifiers used in wireless communication.

Customers and production units

The key customer sector of the company will be the ICT sector, but its customers will also include companies in various other sectors. Among the key customers are ABB, Electro-Hill, Instrumentarium, Metso, Nokia Networks, Oras, Remec, SSH, Suunto and Vaisala.

The company has production units in five localities in Finland. The group also has one production unit in Estonia.


The goal of the company is to achieve a leading position in the development, manufacturing and delivery of solutions containing machined and special-coated RF (Radio Frequency, RF) mechanical components, electronics and sheet-metal mechanics in strategic customer sectors in Europe. An effort will be made also to apply the company’s business concept in the global market in close co-operation with strategic customers and partners.

Strategy and goals

The strategic goals of the merged company will be fast and profitable growth, internationalisation and excellent customer relationship management. The company also aims to be among the suppliers preferred by the leading product manufacturers in the telecommunication sector and to serve as an active link in its customers’ value chains. It aims to match the standard of the best suppliers in the field in terms of technological competence, overall quality and reliability of deliveries. The company strives to add to the value of the end product by enhancing the role of design services. It will also develop electronic methods to improve the process management and promote the transparency of the whole supply chain.

The company will further develop its know-how in material, coating and manufacturing technologies and apply its current expertise to product groups new to the merged company, including RF circuit boards and sheet metal noise filters.

Background for the merger

Significant factors that motivated the merger include the development of technologies and services available in the ICT sector and the anticipated shifts in the design and manufacturing of products within the value chains of the business sector. The merged company will operate over a large part of the value chain of the infrastructure of wireless communication, and it will be able, for example, to provide the complete manufacturing of base station filters up to final assembly and testing. The integration of resources will help to consolidate the role of the company as a supplier of full assemblies and open up new business opportunities.

The company will have a considerable market potential in its operating sector, and in order to optimally utilise this potential, the company must have adequate product development and design resources and a capability to serve customers in a global context. The merger will allow more extensive and international operation than before in both the telecommunication sector and the other customer sectors. The combination of competencies in electronics and RF technologies will also stimulate product development. Volume benefits can be gained in sourcing and logistic operations.


Upon the merger, JMC Tools Oy will become a subsidiary of Incap Corporation. President of the new group as well as the executive management team will be appointed later, and it will consist of representatives of both companies.

It will be proposed to the ordinary annual general meeting on 21 March 2002 that two members of Incap Corporation’s board of directors will be selected by the shareholders of JMC Tools Oy.


In accordance with the merger agreement signed by the boards of Incap Corporation and JMC Tools Oy on 1 March 2002, the merger will be carried out through an exchange of shares in such a way that Incap Corporation will acquire the entire share capital of JMC Tools Oy from the current shareholders of JMC Tools Oy and, in return, will issue new shares to the shareholders of JMC Tools Oy. The main shareholders of JMC Tools Oy have, by virtue of the merger agreement, preliminarily undertaken to exchange their shares for the new Incap shares.

According to the merger agreement, the ratio of exchanged shares will be determined in such a way that the shareholders of JMC Tools Oy will own 70 percent of Incap Corporation’s shares and voting rights after the exchange, taking into account the diluting effect of the A and B warrants in Incap Corporation’s warrant scheme of the year 2000. The exchange ratio is based on the outcome negotiated by the two parties concerning the value of their share capital. Company-external advisors have been consulted concerning this value assessment.

The board of directors of Incap Corporation has received a fairness opinion from PCA Corporate Finance Oy concerning the merger arrangement, which states that the financial terms and conditions of the arrangement are fair for Incap Corporation’s shareholders.

The new shares will entitle their holders to full dividend for the accounting period commencing on 1 January 2002. The subscribers will be entitled to the other shareholder rights as soon as the increase of share capital has been recorded in the trade register. Trading in the new shares is planned to be started on the I list of Helsinki Exchanges by 26 April 2002.

The prerequisite for the merger is that Incap Corporation’s ordinary annual general meeting accepts the issue of new shares required for the merger agreement. Incap Corporation’s board of directors recommends that the annual general meeting accept the measures stipulated as the terms and conditions of the merger. Shareholders, which together hold the majority of the shares and votes of Incap Corporation, have preliminarily undertaken to support the merger and to vote in favor of the directed issue of shares in Incap Corporation’s annual general meeting.

After the merger, the biggest owners of Incap Corporation will be JMC Finance Oy, the biggest owner of which is Kalevi Laurila and his sphere of influence, Finnvera Oyj, Jorma Terentjeff and the companies under his control, Teknoventure Oy and Eqvitec technology funds.

The accounting procedure in the consolidation will be accomplished in accordance with 9 §, chapter 6 of Accounting Act, in which case the exchange of shares will not result in any accounting goodwill.


If Incap Corporation’s annual general meeting approves the measures requisite for the directed issue of shares and the merger and the shareholders of JMC Tools Oy subscribe at least 90 % of the new shares offered to them, the merger will be implemented by 26 April 2002. The JMC shareholders, who own more than 90 % of JMC Tools Oy’s shares and voting rights, have consented preliminarily, upon the execution of the merger agreement, to exchange their shares for the new shares of Incap.

The subscription period for the directed issue of shares will begin on 21 March 2002 after the annual general meeting and end on 19 April 2002. The increase of share capital will be recorded in the trade register on 24 April 2002, and trading in the new shares is expected to begin by 26 April 2002.

The board of directors proposes that the persons who subscribe new shares should abstain from selling 70 % of the new shares issued to them upon the exchange of shares prior to the publication of the nine-month interim report of Incap Corporation in 2002. This restriction on selling applies to all those who subscribe new shares. 30 % of the new shares issued by Incap Corporation will be freely tradable as soon as trading in the new shares begins on the I list of Helsinki Exchanges. According to the proposal, the subscribers of new shares should accept the registration of the above restriction on sale in the book-entry securities system. Incap Corporation’s board of directors may, for stock market reasons and to ensure a normal price development of the shares, allow an exception to this restriction on the sale of new shares. The shareholders represented in Incap Corporation’s board of directors cannot, however, be allowed to circumvent this limitation.

A prospectus about the merger will be published, and it will be available from 14 March onwards at HEX Gate, Fabianinkatu 14, Helsinki, Finland. The prospectus will also be available at Incap Corporation’n main office at Tietäjäntie 4, 02130 Espoo, and it can be ordered by telephone from +358 10 612 2002, by fax from +358 10 612 2050 or by e-mail from


Incap Corporation’s ordinary annual general meeting will be held, contrary to previous information, on Thursday, 21 March 2002, beginning at 11 o’clock in the Iceland Hall of Radisson SAS Royal hotel at Runeberginkatu 2, Helsinki. Sign-up for the annual general meeting is to be done at 16 o’clock at the latest on 11 March 2002 at the latest personally at Incap Corporation’s main office at Tietäjäntie 4, 02130 Espoo, by telephone at +358 10 612 2002/Hannele Pöllä or by e-mail at The summons to the annual general meeting will be published in Helsingin Sanomat and Kaleva on Monday 4 March 2002.


The market for the contract manufacturing of electronics became increasingly difficult during 2001 and demand in many customer segments declined significantly. The growth of turnover in Incap’s electronics sector at the beginning of the year slowed down in the third quarter. The sharp decline in demand of the telecommunications industry affected the operations of JMC Tools Oy already in the beginning of the year 2001.

Demand in the electronics industry is expected to be weak for at least the first half of 2002. The telecommunications sector is projected to start growing in the final months of 2002, when the construction of 3G network infrastructure is expected to pick up. The turnover of the merged company is estimated to grow from previous year and the result is expected to be positive.

Espoo, 1 March 2002


Board of directors

Kari Saarinen

President and CEO

The full press release including tables can be downloaded from the following link.