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23 February 2000

Enterprise Investors makes a new investment in the Polish IT sector

Warsaw, 23 February 2000 — Polish Enterprise Fund, managed by Enterprise Investors, has invested over $1 million in Computer Communication Systems, acquiring 13% of the company’s shares. PEF’s total investment in CCS will be $1.6 million, which represents a 20% stake. The investment makes PEF the second major investor in the firm. CCS is part of the MCI Management Group.

The investment in CCS is an element of the long-term strategy of the funds managed by Enterprise Investors to invest in the Polish IT market. The current value of the market is estimated at $2 billion. The fast-growing market of software and services has reached $700 million, and the services themselves – $460 million. According to analysts from Enterprise Investors, the Polish IT market will grow by 14-15% p.a. (in dollar terms) and the Polish market of IT software and services will grow by 30% p.a. (in dollar terms). Enterprise Investors’ analysts believe systems integration services are one of the most promising segments of the services sector, and the systems integration and local area networks niche is the fastest growing part of systems integration services. They expect the niche to grow by 35-40% p.a. in the near future.

“We are very interested in investing in the IT sector, especially in those companies that are experienced in implementing wide area networks. CCS is undoubtedly one of the best firms and has a long and successful track record in this area,” said Zygmunt Grajkowski, executive vice president of Enterprise Investors, who is directly responsible for the investment in CCS.

Enterprise Investors is the leading venture capital/private equity management firm active in Poland and the CEE region. Since 1990 the funds managed by Enterprise Investors – Polish Enterprise Fund, Polish Private Equity Funds I & II and the Polish–American Enterprise Fund – have invested $520 million in almost 70 companies representing different sectors of the Polish economy. Enterprise Investors is in the process of raising a new fund with capital of about $300 million.

The funds managed by Enterprise Investors have been investing actively in the Polish IT market for one and a half years. The CCS investment brings the total money invested in the Polish IT market by Enterprise Investors to $22 million, which makes EI the biggest venture capital investor in this market.

CCS SA is the sixth company representing the IT sector in the Enterprise Investors investment portfolio. EI already has stakes in Teta, AB, Comp, Biprogeo and CSS. The funds managed by Enterprise Investors have a long track record in IT investments – they were the first to invest in ComputerLand and successfully introduce it to the stock exchange. Enterprise Investors plans more investments in the IT sector in the near future.

Computer Communication Systems SA, located in Wrocław, is one of the top systems integrators and WAN suppliers in Poland. Last year the company’s sales increased by 80%, which was the highest growth rate on the market. Total revenues in 1999 reached PLN 65 million ($16 million). The main projects implemented so far are wide area computer networks as well as internal and external communication systems. An important element of all CCS solutions is the protection of data and information. The company’s major clients are Jeronimo Martins Distribution, Domy Towarowe Centrum in Warsaw, Metro Group, Volvo and Glaxo Wellcome. CCS plans to intensify its activities in the sectors mentioned above and to expand in the area of internet technologies.

“We have concentrated on improving our knowledge of network technologies. We have invested in a splendid team of engineers, who have realized many interesting ideas and implementations. Now it is time to offer our services to a wider group of clients. The support of the experienced and renowned venture capital fund of Enterprise Investors will help us for sure,” said Adam Grzech, president of the Board of CCS.