AcandoFrontec AB (publ) and Resco AB (publ) planning a merger

This press release may not be distributed or published in USA, Australia, Japan or Canada. The offer is not intended for such persons whose participation is conditioned on further prospectuses, registrations or other measures required in accordance with Swedish law. The shareholders of A shares, the Board of Directors and the managements of AcandoFrontec and Resco respectively have agreed to start a process aiming at a merger of the two companies. The aim of the merger is to create a leading company in Northern Europe for business and IT consultants, including a market leading position in Sweden in respect of ERP systems from SAP and Microsoft. The new company will have about 1,000 employees with a turnover of approximately SEK 1 billion. The merger will be realised through a public offer from AcandoFrontec to the shareholders of Resco. Shareholders who represent about 45 percent of the votes in Resco have agreed to accept the offer. The formal decision to issue new shares to cover this offer will be taken at an extraordinary general meeting of AcandoFrontec on 7 February 2006. Shareholders who represent approximately 42 percent of the votes in AcandoFrontec have agreed to support such a decision. The proposed offer is described below. Offer In order to realise the merger, AcandoFrontec AB (‘AcandoFrontec’), quoted on the ‘O-listan’ of OMX Stockholm Stock Exchange, will make a public offer to the shareholders of Resco AB (‘Resco’) also quoted on the ‘O-listan’ of OMX Stockholm Stock Exchange, in respect of all the outstanding shares in the company (‘the Offer’). AcandoFrontec currently own no shares in Resco. The offer is conditional. • The offer means that AcandoFrontec offers one AcandoFrontec share in return for every 2.4 shares of Resco. A-shareholders of Resco AB are offered shares of series A of AcandoFrontec AB whereas holders of B-shares are offered shares of series B. • As an alternative, shareholders of Resco will receive SEK 5.25 in cash per share. • The Offer corresponds to a maximum total value of Resco of about SEK 190 million. • For shareholders who opt to exchange their Resco shares for AcandoFrontec shares, the Offer means a premium of 8 percent compared to the closing price paid on 5 January 2006, of SEK 11.45 for AcandoFrontec and SEK 4.40 in respect of Resco. In comparison with the weighted average price paid during 20 trading days prior to the publishing of the Offer, the exchange of shares results in a premium of 14 percent. • For those shareholders who opt to exchange their shares for cash, the Offer means a premium of 19 percent compared to the closing price paid on 5 January 2006 of SEK 4.40. In comparison with the weighted average price paid during 20 trading days prior to the publishing of the Offer, the exchange of shares for cash results in a premium of 26 percent. • The Board of Directors of Resco recommends unanimously the shareholders to accept the Offer. The new group The company will employ about 1,000 persons in seven countries. The intention is for Lars Wollung to assume the role of managing director and CEO; that Kjell Jacobsson (currently managing director of Resco) will be Vice President in charge of international operations and Per Killiner (currently CFO of Resco) will be CFO. The shared vision of AcandoFrontec and Resco is to become the leading North European regional consultancy company for improving operations through information technology. The focus is on growth and no staff reductions are envisaged in the consultancy organisation. The intention is to change the name of the group to Acando AB. Resco’s operations in Germany with the four business areas SAP, Management Consulting, IT Consulting and Application Management contains the same mix of competencies as AcandoFrontec employs in Sweden. The German operations include 140 employees in offices in Hamburg, Düsseldorf and Frankfurt, a very successful business with a strong growth rate and a sound profitability. In Sweden, Resco runs two business areas, SAP and Microsoft, which overlap the AcandoFrontec operations within SAP and Microsoft. AcandoFrontec is ranked the leading Swedish player within ERP systems with the most satisfied clients and a good profit level. In combination with Resco’s consultants, the joint activities will achieve a market leading position, even in terms of size among the regional consultancy companies in northern Europe. In total, the new company will have approximately 660 employees in Sweden, focusing on business development and ERP systems, IT and integration. In Finland Resco employs 15 SAP consultants, whereas AcandoFrontec has a newly established venture focusing on systems development where the personnel resources are Baltic consultants within the partly owned WMG in Estonia. The merger will create an offer to the clients that includes ERP systems as well as custom-made solutions. In the Baltic region, AcandoFrontec employs, through the partly-owned WMG (where AcandoFrontec has the option to acquire the remaining shares) 155 consultants in Estonia and Lithuania. Furthermore, WMG has offices in Serbia and Romania, with about 25 employees. WMG:s growth during the year of 2005 was very high, as well as the profitability. The savings in costs estimated through the merger amount to SEK 17 million per year, from 2007. The savings in costs for 2006 are estimated at SEK 15 million, but the savings will be balanced by the costs for the restructuring. The restructuring cost of SEK 15 million will be applied to the result for the first six months of 2006. The merger with Resco is estimated to make a positive contribution to AcandoFrontec's earnings with effect from the second half of 2006. Assuming full participation in the exchange for shares alternative, the number of shares in AcandoFrontec will - after full dilution - increase from 60.2 million to 75.4 million. The effect of the aforementioned cost savings amount to approximately SEK 0.23 per share, based on this number of shares. The merger with Resco is expected to make a positive contribution to the AcandoFrontec group's earnings per share with effect from the second half of 2006. Growth The merger will provide a platform for the creation of an improved, more efficient and more reliable offering to the clients. The clients tend to choose fewer and fewer suppliers and set high demands on these in terms of the capacity to deliver and structural capital. In order to be selected as a supplier of consultancy services, the clients today require a geographical closeness as well as sufficient capacity to deliver a mix of competencies that includes business development, ERP systems, IT and integration. The merged company will see a substantially improved competitiveness within a number of industries, areas of competence and geographical markets, which will make the company an even more attractive partner to the clients. The company sees a number of interesting growth areas, such as: • SAP - Substantial efforts are made within the area SAP, the world-leading ERP system for large corporations. Initially the new company will have 200 SAP consultants in Sweden, Finland and Germany, with general agreements with many clients who intend to further develop their operation processes and systems. The critical mass will be achieved within all the major business areas, which are CRM, Supply chain (manufacturing, logistics, ordering), purchasing, product development, After Sales services and financial management. The new strategy of the company SAP and the development of the system’s architecture will mean that future projects within the SAP environment will demand a higher degree of competence from the business consultants, integrations consultants and Java systems development. These competencies are already in place in the company, with about 210 business consultants, 50 integration consultants and 290 systems development consultants (whereof the majority in the Baltic region). The mix of competencies and substantial capacity within all the areas that will be critical is rather unique and the new company is well positioned to assume a leading role within SAP in Europe. Another measure along this route, is the intention to acquire e-motion technology AB with 28 persons in three offices in Sweden. Consequently, the merged company will be strengthened within the technology side of the SAP area. • MICROSOFT - The new company will become the market leader within Microsoft’s ERP systems in Sweden. In addition the company has successful competence within systems development of other Microsoft products and development environments, and when merged, the company will be able to present a complete offering to clients who choose the Microsoft systems environment, with its total of 190 consultants. • INTEGRATION – AcandoFrontec is today the market leader in Sweden within the area ‘integration of systems’. This includes a genuine competence within integration, ranging from strategies to deliveries. The business is today being repositioned towards commissions of a more strategic character where the company utilises its combination of business insight with technological expertise. • MANAGEMENT - Management consultants who understand IT are becoming more critical with the steadily increasing importance of information technology in the business sector and public administration. The new company will have 210 management consultants occupied in the improvement of the clients’ businesses, in close symbiosis with and access to IT specialist colleagues. • SYSTEMS DEVELOPMENT JAVA - Beside Microsoft, Java is the leading development environment for custom-made information solutions, and here the new company will have 290 consultants, primarily in the Baltic region, but with a critical mass in Sweden and Germany. • THE NEW EUROPE - Through the partly owned WMG, the new company is well positioned to take part in the excellent growth within the IT area in the Baltic region and Eastern Europe. These consultants can also be applied to deliver solutions to clients in Western Europe at an attractive total project cost. Offer to Resco’s shareholders Excepting the owners of series A shares who have already committed themselves to accept the exchange of shares for shares in accordance with the Offer, the remaining shareholders may choose either to exchange their shares for shares or for a cash payment of SEK 5.25 for each share of Resco. No brokerage commissions apply to the transaction. The Offer is subject to Swedish law. Furthermore apply the rules of NBK (the Industry and Commerce Stock Exchange Committee) in respect of public offers for shares as well as Aktiemarknadsnämndens (the Securities Council) decisions on the interpretation and application thereof. Any legal disputes in respect of the Offer shall be referred to a Swedish Public Court of Law, with Stockholms Tingsrätt the first court of instance. Conditions for the Offer and future structure of ownership The completion of the Offer is conditional upon the following: 1) that the Offer is accepted to such an extent that AcandoFrontec will become the owner of more than 90 percent of the total number of shares, representing more than 90 percent of the total number of votes in Resco, 2) that all the permissions, approvals, decisions and other measures applied by the authorities or equivalent, including such of the competition authorities that are necessary for the completion of the Offer and the acquisition of Resco have been granted on conditions that are acceptable to AcandoFrontec, 3) that neither the Offer nor the acquisition of Resco in full or in part is made impossible or materially obstructed by legislation or other regulations, by a court verdict, decision of authority or comparable circumstances that prevail or may reasonably be expected, reasons outside of AcandoFrontec’s control and that AcandoFrontec could not have reasonably foreseen at the time of publishing the Offer; and 4) that no circumstance has occurred that AcandoFrontec at the time of publishing the Offer was unaware of, that would have essentially adversely affected Resco’s sales, result, liquidity or equity capital. 5) that the extraordinary general meeting in AcandoFrontec will decide to issue new shares for exchange. AcandoFrontec reserves the right to withdraw the Offer should it become clear that any of the conditions has failed or will fail to be complied with. In respect of the conditions 2), 3) and 4) above, such a withdrawal will only take effect if the failure to comply is of essence to the acquisition by AcandoFrontec of the shares of Resco. AcandoFrontec reserves the right in part or in full to abandon one or several of the conditions above and in respect of condition 1), to complete the Offer at a lower rate of acceptance. Support for the Offer The shareholders of A series shares of Resco who together own shares representing approximately 45 percent of the votes have declared their support for the Offer and will deliver their shares in accordance with the Offer. These holders of A shares will receive A shares in AcandoFrontec. The issue of A shares is a prerequisite for the merger and the company will thus continue to have A shares. The number of A shares will after the exchange of shares amount to 3,640,000. The value of the Offer The value of the Offer is dependant on the price of the AcandoFrontec share at the time of the merger. As an example; the value of the Offer, based on the closing price of the AcandoFrontec share, on 5 January 2006, on condition that the shareholders who have expressed their support for the Offer (see above) will exercise their exchange for shares and that the remaining shareholders of Resco opt for a cash exchange, will be approximately SEK 190 million. Financing of the Offer The Offer will be financed through an issue of new shares in combination with existing liquid assets and bank credits in AcandoFrontec AB. Upon approximately 50 percent participation in the exchange for shares alternative, the equity ratio of the AcandoFrontec group will reduce from currently 67 percent to slightly above 50 percent. Recommendation of the Resco Board of Directors The Board of Directors of Resco AB supports the Offer and recommends unanimously the shareholders of the company to accept the Offer. Preliminary schedule An extraordinary general meeting in AcandoFrontec will be held on 7 February 2006 The prospectus is expected to be published on 13 February 2006 Subscription period 17 February – 10 March 2006 Estimated starting date for cash settlements, around 24 March 2006 AcandoFrontec reserves the right to extend the subscription period and in such case, to delay the starting point for cash settlements. For further information please contact: Lars Wollung, CEO and MD of AcandoFrontec +46-(0)8-699 72 11 Kjell Jacobsson, CEO and MD of Resco +46-(0)70 890 30 50 About AcandoFrontec AcandoFrontec employs 530 members of staff in seven offices in Sweden. Through its part-ownership of the Estonian IT company WMG, another 180 people in five countries are employed. Since 1995, AcandoFrontec is listed on the ’O-listan’ of OMX Stockholm Stock Exchange with the ticker code ’AFAB’. About Resco Resco was founded in 1982 and today has 280 employees in Sweden, Germany and Finland. Since 1996, the company is listed on the ’O-listan’ of OMX Stockholm Stock Exchange with the ticker code ‘RESC’.