The News

Esmertec raises CHF 23.5 Million from convertible note to fund growth

26/10/2004

Proceeds to be used for international expansion and technology development

Duebendorf-Zurich, Switzerland – October 26, 2004 – Esmertec™, a leading provider of software solutions for mobile phones and embedded devices, announced today that it successfully raised CHF 23.5 million from existing shareholders and new investors through the placement of a four-year maturity convertible note.  Proceeds from the note, which was arranged by Bank Julius Baer & Co. Ltd., will be used to further develop Esmertec’s presence in Asia, extend its product portfolio and to strengthen the company’s working capital position.

Edwin Douglass, Chief Financial Officer for Esmertec, said, “We received strong interest from investors during the placement. Proceeds from the convertible note will enable us to accelerate our current growth.” Note holders have a deferred right to convert the note into shares in the event of a future IPO, starting from six months after a public listing date. 

“We are experiencing significant demand within our core wireless handset market. We are also beginning to see shipments ramp up in the set-top box market. We believe it is important to leverage this momentum and continue to make investments in our organization and technology development in order to ensure future growth,” said Alain Blancquart, Esmertec’s Chairman and CEO.

About Esmertec
Esmertec is a leading provider of software solutions and technologies for mobile phones, PDAs and embedded devices. Esmertec's solutions are applied in telecommunication, home-multimedia, machine-to-machine, consumer electronics and industrial automation markets. Esmertec's wireless Java™ (J2ME) products and object-oriented platforms deliver high-performance computing on devices with minimal memory to chipset and embedded device manufacturers. Founded in 1999, Esmertec is a global company headquartered in Zurich, with engineering, sales and customer support operations in Switzerland, France, Denmark, the UK, the USA, China, Hong Kong, Korea, Japan and Taiwan.

Media Contact:
Leng Stricker
Phone +41 1 823 8900
lstricker@esmertec.com

This press release is not an offer of securities for sale in the United States.  No securities may be offered or sold in the United States absent registration or an exemption from registration, and any public offer of securities to be made in the United States will be made by means of a prospectus that may be obtained from Esmertec AG.  Such prospectus will contain detailed information about Esmertec and its management, as well as its financial statements.

This press release is not being made and may not be distributed or sent into Australia, Canada or Japan. This document is only directed at persons who: (i) are outside the United Kingdom; or (ii) have professional experience in matters relating to investments; or (iii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (all such persons being together referred to as “relevant persons”).  This press release must not be acted on or relied on by persons who are not relevant persons.  Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Stablisation/FSA.
The announcement is not an offer of securities under Swiss Law. It is not a listing prospectus according to art. 652a and/or art. 1156 Swiss Code of Obligations or art. 32 ff. Swiss Listing Rules and is not a listing notice according to art. 45 ff. Swiss Listing Rules.

Esmertec is a trademark of Esmertec AG. Java is a trademark of Sun Microsystems, Inc.