Flomerics to Acquire NIKA GmbH


London; June 15, 2006) - Flomerics Group plc today announced that it has reached agreement on the proposed acquisition of the entire share capital of NIKA GmbH (www.nika.biz), the Engineering Fluid Dynamics software company based in Frankfurt, Germany and specializing in simulation tools for the prediction of fluid flow and heat transfer.

NIKA's world-leading computational fluid dynamics technology is derived from 8.5 million of product development investment, primarily in Russia where scientific expertise is excellent and costs are low. NIKA's technology enhances Flomerics' existing product range and gives access to a much wider potential customer base of design engineers outside Flomerics' existing core market. There is a significant opportunity to expand NIKA's sales immediately into countries such as the USA and the UK where Flomerics already has a strong presence.

NIKA's "EFD" product is a suite of Computational Fluid Dynamics (CFD) software simulation programs used as part of the design process for a wide variety of products including vehicles, home appliances and electronic equipment.

EFD stands for "Engineering Fluid Dynamics", which encapsulates NIKA's unique approach to embedding CFD technology deeply into mainstream Mechanical Computer Aided Design (MCAD) software, to a level unrivalled by other CFD software vendors. NIKA uses application programming interfaces (APIs) from SolidWorks, Pro/ENGINEER Wildfire, & CATIA V5 to create a familiar user interface for users of each of these MCAD tools. Even more important is that the EFD solver interacts directly with the "native" MCAD data to create the analysis model, rather than the easier and more common approach of extracting data by file transfer and conversion. NIKA's approach ensures that the thermal/fluid analysis is fully embedded in the central mechanical design flow, with no possibility of inconsistencies developing between CAD and "analysis" versions of the product.

NIKA and Flomerics already share many well-known customers such as Alcatel, BAE Systems, Black & Decker, Delphi, Intel, Mitsubishi, Thales, Samsung, Siemens, and Toyota. NIKA's impressive customer list also includes companies such as DAF, Electrolux, Honda, Lufthansa, Miele, Olympus, Pirelli, Tyco and Volkswagen - to name just a few.

Flomerics' Chief Executive, Gary Carter, said: "The proposed NIKA acquisition helps Flomerics to consolidate our leading position in our core markets such as electronic thermal analysis, and at the same time opens up a whole new market opportunity in putting complex CFD technology into the hands of mechanical designers. NIKA brings us new, cutting-edge technology, new products, new customers, and new strategic partnerships. Flomerics can immediately increase sales of EFD products in many territories through our global sales infrastructure."

NIKA's Managing Director, Roland Feldhinkel, added: "We are very excited to become a part of Flomerics Group. Flomerics has achieved clear market leadership in physical design of electronics, and we are confident that Flomerics global presence and sales and marketing strengths will help us make the most of NIKA's world-leading technology."

For further information please contact:
Mike Reynell, Director of Marketing, Flomerics Ltd, +44 208 487 3000

Background information on NIKA GmbH

Formed in 1999, NIKA is a German-based software company employing over 70 people with the largest group being a team of 45 software developers based in Moscow. NIKA's principal product - EFD - is a suite of computational fluid dynamics (CFD) simulation tools aimed at design engineers and tightly integrated with the world's leading MCAD (Mechanical Computer Aided Design) tools such as SolidWorks, Pro/Engineer and CATIA. NIKA has established a strong revenue stream through a longstanding agreement with SolidWorks Corporation, under which NIKA's COSMOSFloWorks product is exclusively marketed by SolidWorks and its international reseller channel.

EFD has become an integral part of the product development process for hundreds of companies because the key technologies behind NIKA's unique Engineering Fluid Dynamics approach successfully address the high demands of usability, accuracy, efficiency and affordability. The fundamental philosophy behind EFD has a lot in common with that behind the existing Flomerics products, namely delivering complex simulation software in a way that is easily accessible and usable by engineers who are not analysis specialists. Whilst CFD is an established technology which has been used by specialists for many years, the delivery of CFD solutions to broad-based mechanical CAD (MCAD) users in the engineering design community is relatively new. Since the number of installed seats of MCAD software is orders of magnitude greater than the number of seats of simulation software, this represents a significant opportunity for growth.

With their EFD approach, NIKA has created a new and much wider field of applications for fluid flow and heat transfer analysis. The EFD products are used by engineers in companies whose products depend in a critical way on fluid flow and heat transfer phenomena. NIKA's customer list includes more than 1000 companies such as BAE Systems, Bell Helicopter, Black & Decker, Continental, Delphi, Dräger Eastman Kodak, Electrolux, Friedrich Grohe, Fuji Film, Honda, Intel, LG Electronics, Miele, Mitsubishi, Nasa, NEC, Northrop Grumman, OCE, Siemens, Thales, Thyssen, Toyota, and TRW. A number of these are also existing customers of Flomerics.

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