Reply signed the acquisition of Communication Valley Spa from UniCredit group. Leading Italian Security Operation Centre will enhance Reply’s worldwide offering in the "Business Security & Data Protection" area

10 March 2008

Reply S.p.A. – a company listed on the STAR segment of Borsa Italiana [REY.MI] – has acquired from Kyneste S.p.A., a technology infrastructure company of UniCredit group, 100% of the share capital of Communication Valley S.p.A., a company focused on consultancy, integration and management of Information Security Systems (ICT Security).

Founded in 1996 and since 2000 part of Kyneste, Communication Valley is headquartered in Parma with 59 employees achieving revenues 9.1 million Euros worth in 2007 with EBITDA of 17.6%, EBIT of 16.9% and net income 9.5%. During the time frame 2003-2007 the company has grown by an average of 46% annually.

Reply has decided to finance the acquisition of Communication Valley, based on an equivalent value of 14.5 million Euros, through the line of credit, established in December 2005, for M&A operations.

With the acquisition of Communication Valley, Reply extends its offering in terms of services targeted to Business Security & Data Protection.

At present Communication Valley enjoys a leading position in Italy – especially in the Banking and Insurance industries – within the “Managed Security Services”, that are delivered through a fully owned “SOC” (Security Operation Centre).

This structure, among the few in Italy focused on remote monitoring and management services of ICT Security, has stable relationships and agreements with some of the major Italian Bank Groups such as UniCredit, Intesa Sanpaolo, Banca Sella and Barclays.

“Communication Valley joins the Reply Group – has declared Mario Rizzante, Reply President – thus enhancing our offer targeted to Security with services complementing those presently delivered by the Group. This enables Reply to position among the leading companies of an industry characterized by growth rates far above the market average”.

According to the latest surveys carried out by the major market analysis companies, investments made in specialized ICT security services in Italy are expected to show “two digit” average growth rates for the years 2008-2010. This will result from the increasing trend by the companies to invest in more and more integrated and enhanced Business Security & Data Protection solutions.

“With the acquisition of Communication Valley - continues Mario Rizzante – Reply completes its current offering, unique in the Italian landscape, specially targeted to Security and integrated with the whole value chain: from the risk analysis to the issues linked to Governance, Compliance and Regulations, up to risk mitigation, remote monitoring and management”.

“This acquisition – concludes Mario Rizzante – allows Reply to strengthen its competitive positioning in the Bank industry, especially with Unicredit that ranks among the world’s top ten banks”.

“The sell-off of Communication Valley - has declared Umberto Quilici, Vece President of Kyneste and President of UniCredit Global Information Services (UGIS) – allows to keep on implementing our strategy focused on core business and re-organization of Information Technology activities, in accordance with a service model fully targeted to meet the Group internal requirements. UniCredit has decided to leverage the investment made in Communication Valley by virtue of its best-in-class positioning within the relevant reference market”.

“To join the Reply Group, one of the major players in Information Technology, means for Communication Valley an excellent opportunity to fully leverage its growth potential and know-how – concludes Umberto Quilici. – UniCredit intends to benefit from the specialized services provided by Communication Valley also in the future and appreciates the relevance of this deal with Reply, a highly valued UniCredit vendor, further consolidating the existing relationships”.