INCAP SIGNS A LETTER OF INTENT ON THE ACQUISITION OF A BUSINESS IN INDIA

INCAP CORPORATION STOCK EXCHANGE RELEASE

27 February 2007 at 8.30 a.m.


INCAP SIGNS A LETTER OF INTENT ON THE ACQUISITION OF A BUSINESS IN INDIA


Incap Corporation and TVS Electronics Limited have signed a Letter of Intent on the acquisition of TVS Electronics’ contract manufacturing unit. The objective is to transfer the business operations to a new Indian subsidiary of Incap during the 2nd quarter of 2007.


The business operations to be acquired by Incap are located in Tumkur, South India near Bangalore. There are approximately 260 employees working in the unit currently and its services cover besides the electronics manufacturing and product integration also materials procurement, distribution and logistics services as well as maintenance. The factory unit with a floor space of approx. 6,000 square metres manufactures power supplies and medical electronics, among others, to customers in India and Europe.


With this acquisition Incap seeks growth and internationalisation in accordance with its strategy, and the company aims to strengthen its position as an international partner to the world’s leading equipment manufacturers. For this end, the company has been exploring the possibility of starting up manufacturing operations in India and has had a sales office in New Delhi since early 2006. Incap’s target is to gain revenue of about EUR 10 million from its India business during the year 2007.


According to Juhani Hanninen, President and CEO of Incap Corporation, this business deal under negotiation is a significant step in Incap’s internationalisation. “Already in early stages of our study we concentrated in searching for a local partner in India, because it is the fastest way to realise our chosen strategy. In addition to a smooth functioning production facility we will also receive an established customer base, because TVS Electronics’ contract manufacturing unit has a stable market position.”


“We will also have TVS Group’s support in developing our business further in the future. Actually this is more about building a partnership in India with the recognised TVS Group rather than just an acquisition”, says Hanninen.


Gopal Srinivasan, Director, TVS Electronics Ltd. says: “We believe that this move will continue to provide outstanding services to our valuable customers in India and Europe who will additionally benefit from Incap’s global contract manufacturing delivery platform. Thus, it best serves the interest of customers, employees and other stakeholders”.


TVS Electronics Limited, a part of the 95-year-old TVS Group is one of the largest manufacturers of computer peripherals in the country. The range of offerings includes products such as dot matrix printers, keyboards, printing supplies, transaction solutions and customer support services.


TVS-E has a large distribution and service network, which reaches over 450 towns across the country with two national distributors, more than 200 regional distributors and over 3,000 authorized dealer partners. The company has manufacturing facilities in Tumkur and Chennai. Further information from www.tvse.com and www.tvsgroup.com


Nordic Adviser Group has assisted Incap in setting up operations in India and acted as the lead transaction adviser.


INCAP CORPORATION


Juhani Hanninen

President and CEO


For additional information, contact:

Juhani Hanninen, President and CEO, tel. +358 50 556 7199

Anne Sointu, Chief Financial Officer, tel. +358 40 347 2059

Hannele Pöllä, Director, Communications and Investor Relations, tel. +358 40 504 8296


DISTRIBUTION

Helsinki Stock Exchange

Principal media


INCAP IN BRIEF

Incap Corporation is a fast-growing electronics contract manufacturer whose comprehensive service covers the entire product life cycle from design and manufacture to repair and maintenance services. The company’s main customer sectors are leading equipment suppliers in telecommunications, electrical power technology, the automation and process industries as well as measurement technology, safety electronics and health care. The Incap Group’s revenue in 2006 amounted to EUR 89 million and the company currently employs approx. 540 persons. Incap’s share is listed on the Helsinki Stock Exchange and it is a component of the Nordic Small Cap list within the information technology sector. For additional information, please visit www.incap.fi