SINGAPORE-Flextronics will acquire Hughes Network Systems’ 55-percent ownership stake in Hughes Software Systems, which provides software products and services to telecom infrastructure companies, for $226 million.
Together, Flextronics and HSS will provide a complete outsourcing solution to telecom original equipment manufacturers, including engineering services, system assembly and manufacturing, logistics services and after-market services.
“This partnership should offer significant opportunities to cross sell our respective products and services to a very complementary telecom customer base,” said Michael Marks, chief executive officer of Flextronics. “We are committed to expanding design services into every product area where we have a manufacturing presence. HSS will enable us to move quickly into the telecom infrastructure space. We are thrilled to have this opportunity.”
HSS reported revenue of approximately $80 million and net income of approximately $17 million in its fiscal year, ended March 31. The company’s revenues grew approximately 63 percent during fiscal 2004 and are expected to grow approximately 25 percent in fiscal 2005.
The transaction is expected to close by October, following regulatory approval.
