Proposed Placing and Acquisition

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28 January 2011

Telit Communications Plc

Proposed Placing

Telit Communications Plc ("Telit" or the "Company"), a leading m2m wireless technology company, is pleased to announce a conditional placing of 23,793,750 new Ordinary Shares at 80 pence per share to raise £19.0 million (before expenses) in order to finance the acquisition of Motorola m2m from Motorola for a sum of $26.0 million.

Information oN Motorola m2m

Motorola m2m was established by Motorola in 2000 and specialises in the design, development, integration, evaluation and deployment of m2m applications worldwide and offers a variety of m2m modules for wireless technologies such as GSM, GPRS, CDMA and WCDMA.

Motorola m2m has more than 100 customers and distributors globally, and has developed partnerships with telecommunications carriers throughout the world.

Motorola m2m's headquarters are in Tel-Aviv, Israel, while manufacturing of its products is undertaken in Israel, China and Brazil. A majority of the relevant Motorola m2m employees are located in Israel, while others are located in the US, the UK, Germany, Brazil and Singapore. The business has not been operated as a standalone entity and has been dependent on the provision of centralised services from Motorola.

Rationale for the Acquisition

The Directors believe that the benefits to Telit of acquiring Motorola m2m include:

- further expansion into the growing m2m market;

- opportunities for cross-selling of products and increased customer account development;

- enhanced research and development capabilities;

- a broadening of Telit's m2m product offering;

-  enhancement of Motorola m2m's products through Telit's commitment to long-term product support; and

- other cost synergies (including through procurement efficiencies and utilisation of lower manufacturing costs).

Based on Telit's expected unaudited revenues for the year ended 31 December 2010 and information provided to the Directors by Motorola, the combined business would have had consolidated pro forma revenues of approximately $180 million in 2010. Based on independent market forecasts, it is estimated that the combined business therefore would have had pro forma market share in excess of 20% for the year ended 31 December 2010.

The Directors believe that the Acquisition will be earnings enhancing to the Company in the first full year of ownership.

Background to and reasons for the Placing

Telit Israel entered into the APA on 28 January 2011. Pursuant to the APA, completion of the Acquisition is to occur two Business Days following Admission. Admission is conditional on, inter alia, Shareholder approval and receipt of Regulatory Approvals which include obtaining approvals from the Office of the Chief Scientist of the Israeli Ministry of Industry, Trade & Labour as well as the Israeli Anti-Trust Authority, for the Acquisition. Approval is expected to be received within 30 to 35 days from the date of this announcement. The Company is in receipt of irrevocable undertakings to vote in favour of the Resolutions totalling 42,948,599 Ordinary Shares which represent 52.4% of the Existing Ordinary Shares.

The Placing

General

The Company proposes to raise £19.0 million (before expenses) through the issue of the Placing Shares at the Placing Price. The Placing is being carried out on a non-pre emptive basis to institutional and other professional investors and has been fully underwritten by Investec, subject to the terms of the Placing Agreement. The expenses of the Placing are expected to be approximately £0.9 million. The Placing Price represents a premium of approximately 14.3 per cent. to the closing mid-market price of 70 pence per Ordinary Share on 27 January 2011, being the latest practicable dealing date prior to the date of this announcement. The Placing Shares will represent approximately 23.6 per cent. of the Enlarged Issued Share Capital.

The Placing Agreement

Pursuant to the terms of the Placing Agreement, Investec, as agent for the Company, has conditionally agreed to use its reasonable endeavours to procure subscribers for the Placing Shares. Investec has conditionally placed the Placing Shares with a number of institutional investors and other professional investors at the Placing Price. The Placing has been fully underwritten by Investec, subject to the terms of the Placing Agreement.

The Placing Agreement is conditional upon, inter alia, the Resolutions being duly passed (without amendment) at the General Meeting, the APA having become unconditional in all respects (including receipt of Regulatory Approvals), the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms and Admission becoming effective on or before 8.00 a.m. on 11 March 2011 (or such later time and/or date as the Company and Investec may agree, but in any event by no later than 8.00 a.m. on 31 March 2011) (the "Long Stop Date"). The Company expects that the Regulatory Approvals shall be granted, and the APA shall otherwise become unconditional in all other respects within 30 to 35 days from the date of the APA. As such, if the Regulatory Approvals are granted later than 8 March 2011, then Admission accordingly will be delayed until after the receipt of the Regulatory Approvals. If the Regulatory Approvals are not granted by the Long Stop Date, Admission will not occur.

The Placing Agreement contains warranties from the Company in favour of Investec in relation to, inter alia, the accuracy of the information in this announcement and other matters relating to the Company and its business. In addition, the Company has agreed to indemnify Investec in relation to certain liabilities it may incur in respect of the Placing. Investec has the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event of a material breach of the warranties given to Investec in the Placing Agreement, the failure of the Company to comply in any material respect with any of their respective obligations under the Placing Agreement, the occurrence of a force majeure event or a material adverse change affecting the condition, or the earnings or business affairs or prospects of the Group as a whole, whether or not arising in the ordinary course of business.

Settlement and dealings

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the Placing Shares on AIM will commence at 8.00 a.m. on 11 March 2011.

The Placing Shares will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared on or after the date on which they are issued. It is expected that CREST accounts will be credited with entitlements to Placing Shares as soon as possible after 8.00 a.m. on the day of Admission and that share certificates (where applicable) will be despatched by 11 March 2011.

The Company currently has 77,169,734 Ordinary Shares in issue. Immediately following Admission, the Company will have 100,963,484 Ordinary Shares in issue.

The circular

The Company will later today publish a shareholder circular containing, inter alia, further details of the Placing and a notice convening the General Meeting at which the Resolutions will be proposed. The circular will be available at www.telit.com.

Trading Update

On 20 January 2011 the Directors announced that "the Company expects that unaudited revenues for the year ended 31 December 2010 will be at approximately $132.0 million, an increase of 48% above revenues for the year to 31 December 2009 (2009: $88.8m). Net debt is expected to be approximately $7.8 million (2009: $10.4m)."

Trading since 20 January 2011 has been in line with management expectations.

Oozi Cats, CEO of Telit said:

"This acquisition is a strategic milestone for our company. It will allow us to pursue the further expansion into the fast growing machine-to-machine communication market and to continue to deliver on our strategy to become the leading provider of machine-to-machine communication solutions worldwide. We are convinced that the acquisition will generate synergies, new opportunities for cross-selling of products and increased customer account development. Moreover our company as well as our customers will benefit from enhanced research and development capabilities broadening Telit's machine-to-machine communication product offering."

Enquiries:

Investec Investment Banking, a division of Investec Bank plc, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for the Company in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Investec or for providing advice in relation to the Proposals or any other matter in relation to the contents of this announcement.

This announcement has been issued by Telit Communications Plc and is the sole responsibility of the Company. This announcement has not been approved by Investec for the purposes of section 21 of FSMA. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Investec or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities or any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, such securities by any person in any circumstances, and in any jurisdiction, in which such offer or solicitation is unlawful. Accordingly, copies of this announcement are not being and must not be mailed or otherwise distributed or sent in or into or from the United States, Canada, Australia, Japan, the Republic of South Africa or the Republic of Ireland or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction (each a "Restricted Jurisdiction") or to, or for the account or benefit of, any United States, Canadian, Australian, Japanese, South African or Irish person and any person receiving this announcement (including, without limitation, custodians, nominees and trustees) must not distribute or send it in or into or from a Restricted Jurisdiction.

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the Directors' current intentions, beliefs or expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the Company's markets. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual results and developments could differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this announcement are based on certain factors and assumptions, including the Directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity. Whilst the Directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect. Save as required by law or by the AIM Rules, the Company undertakes no obligation to publicly release the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Directors' expectations or to reflect events or circumstances after the date of this announcement.

Expressions used in this announcement shall have the meanings set out in the Appendix to this announcement.

Additional Information

1. INFORMATION ON TELIT

Company overview

Telit is a wireless technology company which designs, develops, manufactures and markets internationally GSM, GPRS, UMTS, HSDPA, CDMA and short range RF (including WiFi and ZigBee) communication modules for m2m applications. The Company's technology and products enable other electronic devices and equipment manufacturers to utilise GSM and GPRS cellular infrastructure to relay and accept information without human intervention. m2m applications therefore enable machines, devices and vehicles to communicate via wireless networks.

Telit's m2m solutions utilise a proprietary protocol stack, the software for the cellular engine, that facilitates communication between industry vertical applications and a wireless network.

The Directors believe that Telit's ability to integrate its modules with a variety of different vertical applications on a highly-customised basis, combined with a lengthy period (typically 2-3 years) of tendering and then design work with a customer, assists it in developing strong relationships with its customers.

The Directors also believe that continued investment by Telit in its staff has enabled the Company to retain skill sets and domain experience throughout the economic downturn and has left Telit well positioned to take advantage of key growth drivers in the market. In particular, the Directors intend to focus on those sectors where growth is driven by regulatory change and where the Directors believe that m2m can deliver a strong return on investment to its customers. The Directors consider that the breadth of Telit's product portfolio, covering 2G, 2.5G and 3G cellular technologies as well as short range communication technologies, together with its strong brand and stable, experienced employee base leave the Company well positioned to capitalise on growing opportunities in an expanding market.

Telit sells its products both directly and through a global network of more than 30 distributors to approximately 1,000 customers, communications solution providers and systems integrators in more than 50 countries around the world.

Telit's headquarters are in Rome, Italy, with regional headquarters in Raleigh North Carolina, US and Seoul, Korea. Its research and development centres are in Trieste and Cagliari, Italy, Seoul, Korea and Sofia Antipolis, France, with regional sales offices in Brazil, China, Denmark, France, Germany, Israel, Italy, Korea, Russia, Spain, the Republic of South Africa, Taiwan, Turkey, the UK and the US. Telit currently employs approximately 350 employees worldwide.

Market overview

The m2m market is estimated to have been worth $842 million in 2010 and to have grown by approximately 20% from the previous year. The market is forecast to grow at an average annual rate of approximately 17.0% during the period 2009-2014. The Directors believe that this growth will occur partly as a result of regulatory change, such as smart-metering programmes increasing demand for m2m applications, and partly due to the continued market expansion as unit prices decrease. It is estimated that the average m2m unit selling price decreased by over 26% between 2008 and 2010 and it is forecast that this trend will continue, albeit at a slower rate, but that this will be more than offset by growth in unit sales. The Directors believe that Telit is well positioned in the m2m market, and is today considered to be the third largest global supplier of m2m modules by revenues. (Source: Beecham Research Market Brief: Worldwide Cellular M2M Modules Forecast, August 2010)

2. INFORMATION ON MOTOROLA M2M

Motorola m2m was established by Motorola in 2000 and specialises in the design, development, integration, evaluation and deployment of m2m applications worldwide and offers a variety of m2m modules for wireless technologies such as GSM, GPRS, CDMA and WCDMA.

Motorola m2m has more than 100 customers and distributors globally, and has developed partnerships with telecommunication carriers throughout the world.

Motorola m2m's headquarters are in Tel-Aviv, Israel, while manufacturing of its products is undertaken in Israel, China and Brazil. A majority of the relevant Motorola m2m employees are located in Israel, while others are located in the US, the UK, Germany, Brazil and Singapore. The business has not been operated as a standalone entity and has been dependent on the provision of centralised services from Motorola.

Unaudited accounting information provided by Motorola indicates that Motorola m2m's estimated financial performance on a standalone basis over the past three years is as stated below.

The Company's analysis of Motorola m2m's sales for the year ending 31 December 2010 indicates that the top ten customers contributed approximately 70% of revenues.

The decline in Motorola m2m's revenues from 2007 to 2009 was 39%, while the overall value of the m2m market fell by 29% over the same period. The Directors believe that the additional decline in Motorola m2m revenues compared to the market in this period was principally the result of the loss of one major customer, following the termination of a significant project.

The financial information detailed above relating to Motorola m2m is based on US GAAP. The Directors do not believe that there will be any significant financial reporting adjustments and that Motorola m2m's financial performance would not materially differ if stated according to Telit's accounting policies under IFRS.

3. TERMS OF THE ACQUISITION

Under the terms of the APA, Telit Israel has agreed to acquire Motorola m2m, for an aggregate purchase price of $26.0 million, subject to a post-completion adjustment based on the amounts of accounts receivable, inventory and tangible assets of Motorola m2m as at completion of the Acquisition. The assets and liabilities include:

- all rights relating to the existing product portfolio and customer database of the business;

- other assets related to the business including equipment, inventory and trade account receivables;

- warranty liability in relation to products already sold by the business (such warranties typically having a duration of 15 months);

- a perpetual licence of a certain Motorola software (known as P2K) used across some of the product portfolio; and

- approximately 40 employees.

Completion of the APA is conditional upon, inter alia, obtaining the approvals from the Office of the Chief Scientist of the Israeli Ministry of Industry, Trade & Labour as well as the Israeli Anti-Trust Authority for the Acquisition and no material adverse change having occurred in relation to the business being acquired. Pursuant to the APA, it is provided that completion will occur two Business Days following Admission, and that Admission shall not occur until all other conditions to completion have been satisfied. Once Admission has occurred, the APA is not capable of termination or rescission by either party to it.

The APA contains warranties from Motorola in favour of Telit Israel in relation to, inter alia, the due preparation of financial information relating to the business, intellectual property, title to and condition of assets being acquired, compliance with law and employment matters. The APA contains warranties from Telit Israel to Motorola to the effect that, inter alia, it has due power and authority to enter into the APA, there is no current or pending litigation which would threaten Telit Israel's ability to complete the Acquisition and it has not relied upon any representations of Motorola in relation to the Acquisition, save for those expressly set out in the APA.

Telit has agreed to guarantee the obligations of Telit Israel under the APA. Pursuant to the terms of the guarantee, Telit agrees that if Telit Israel has defaulted in the performance of, or failed to adequately perform, any of its obligations or liabilities under the APA Telit agrees, upon demand, to unconditionally perform (or procure performance of) the relevant obligations or liabilities. Therefore if, for example, Telit Israel was found to be in breach of one of its warranties under the APA, Motorola could bring an action directly against Telit under the terms of the guarantee.

4. IRREVOCABLE UNDERTAKINGS

Telit has received irrevocable undertakings to vote (or procure the vote) in favour of the Resolutions at the General Meeting, from the following shareholders:

The Directors and connected persons have irrevocably undertaken to vote (or procure the vote) in favour of the Resolutions in respect of their entire beneficial shareholdings in the share capital of Telit, amounting in aggregate to 25,596,099 Ordinary Shares, representing approximately 33.2 per cent. of the Existing Ordinary Shares.

In total, therefore, Telit has received irrevocable undertakings to vote (or procure the vote) in favour of the Resolutions at the General Meeting, in respect of 42,948,599 Ordinary Shares in aggregate representing approximately 55.7 per cent. of the Existing Ordinary Shares.

5. RELATED PARTY TRANSACTION

Due to its holding of over 10 per cent. of the Existing Ordinary Shares, the participation in the Placing of Algebris Global Financials Master Fund (which currently has direct control over 19.2% of the Existing Ordinary Shares) is deemed to be a transaction with a related party under the AIM Rules. Algebris has conditionally subscribed for 7,500,000 Placing Shares which will result, following completion of the Placing, in the holding of Algebris Global Financials Master Fund representing approximately 22.1% of the Enlarged Issued Share Capital. Algebris Global Financials Master Fund has participated in the Placing on the same terms as all other placees.

The Directors, having consulted with the Company's nominated adviser, Investec, consider that the related party transaction is fair and reasonable insofar as Shareholders are concerned.

6. ARRANGEMENTS RELATING TO SHARES HELD BY BOOSTT B.V.

Boostt B.V. ("Boostt"), together with its connected persons, is currently interested in 19,960,357 Ordinary Shares in aggregate (being approximately 25.9% of the Existing Ordinary Shares), and is controlled in equal 50 per cent. parts by, firstly, Wireless Solutions Management S.L. ("WSM") and its corporate parent Techvisory S.A. ("Techvisory") (and through which Enrico Testa holds an interest) and, secondly, by Oozi Cats, a director of the Company and its CEO. Boostt has entered into financing arrangements in relation to the Ordinary Shares held by it, such arrangements as at the date of this announcement being as summarised below. Announcements will be made by the Company as appropriate when it is notified by Boostt of any change in these arrangements.

As previously announced by the Company, on 16 April 2007 Boostt entered into an agreement with Polar Investments Limited ("Polar") (the "Boostt Share Purchase Agreement") pursuant to which it purchased 12 million Ordinary Shares from Polar, which was at the time the controlling shareholder of the Company. Pursuant to the Boostt Share Purchase Agreement, 50% of the consideration was paid by Boostt immediately, and the remaining 50% was to be paid in six equal interest-bearing instalments beginning in November 2009 and every six months thereafter, with the interest being payable every six months beginning from 4 November 2007. 6 million Ordinary Shares were transferred to Boostt by Polar in May 2007 and 6 million were charged in favour of Polar and placed in escrow (the "Escrow Shares"), to be released to Boostt in proportion to the payment of the instalments or to Polar, in the event that the instalments were not paid. Subject to the escrow arrangements, and according to the provisions of the Boostt Share Purchase Agreement, Boostt has, from 16 April 2007, been entitled to exercise all rights attaching to all of the 12 million Ordinary Shares purchased, including but not limited to the rights to nominate directors, voting rights and the right to participate in dividends and other distributions.

Shares held in escrow

As at the date of this announcement, 6 million Ordinary Shares remain in escrow pursuant to these arrangements. In July 2010, Boostt and Polar agreed a change in the terms of payment under the Boostt Share Purchase Agreement, pursuant to which it is provided that the consideration due from Boostt is to be settled in full by no later that 1 July 2011 and that upon such settlement the Escrow Shares will be released from Escrow. If settlement is not made by 1 July 2011, then Polar will be entitled to enforce its security and take a transfer of the Escrow Shares.

Shares charged to the shareholders of Boostt

Telit announced on 24 April 2009 that it had been notified that Boostt had granted a charge in favour of Boostt's shareholders over 6 million of the Ordinary Shares held by it (the "Charged Shares"). The charge was granted because Boostt had financed the purchase of the Charged Shares.

Since 10 December 2010, Boostt has charged a further 3,000,000 of its Ordinary Shares to related parties of Boostt in order to secure certain funding used to repay part of the loan noted below.

Shares charged in favour of a third party finance provider

As previously announced by the Company, Boostt subscribed for, in aggregate, 3.5 million further Ordinary Shares in July 2009 and December 2009. Boostt has since notified Telit that it secured a bank loan of €0.9 million in order to fund these subscriptions, and secured this financing by charging 9.6 million Ordinary Shares (being all of the Ordinary Shares (including the Charged Shares) held directly by Boostt except for the Escrow Shares) to the bank. This charge has since been partially released in relation to 3 million Ordinary Shares as a result of the part repayment noted above. 6.6 million of the Charged Shares accordingly remain subject to charges in favour of both the shareholders of Boostt and a third party lender.

7. APPLICABILITY OF THE TAKEOVER CODE

Although the Company has its registered office in England, the place of central management and control of the Company is currently located outside the UK, the Channel Islands and the Isle of Man. Accordingly, the Takeover Panel has confirmed that the Company is not subject to the Code and Shareholders will not be afforded any protections under the Code. The Company notes that this is contrary to certain statements contained in the Company's AIM admission document dated 30 March 2005.

If circumstances change, including if further changes to the Board are made, the Company will consult with the Takeover Panel to ascertain whether this will affect the place of central management and control of the Company. If the Takeover Panel determines that, as a result of such changes, the place of central management and control of the Company is located in the UK, the Channel Islands or the Isle of Man such that the Code then becomes applicable to the Company, an announcement will be made.

As Telit is not currently a company subject to the Code, Shareholders are currently able to increase their interests in voting rights in Telit to 30% or more without having to make a mandatory offer under the Code.

8. CORPORATE GOVERNANCE

Telit intends to strengthen its Board in the near future with the appointment of an additional experienced non-executive director to provide further guidance to the Company.

9. GENERAL MEETING

The proposed Placing is conditional upon, inter alia, the passing of the Resolutions at the General Meeting.

The Resolutions to be proposed at the General Meeting are as follows:

Resolution 1 - authority to allot the Placing Shares

Resolution 1 is an ordinary resolution which will authorise the Directors to allot the Placing Shares. Unless revoked, varied or extended, such authority shall expire on the date of the next Annual General Meeting or 31 July 2011, whichever is the earlier.

Resolution 2 - disapplication of pre-emption rights in relation to the Placing Shares

Resolution 2 is a special resolution which will disapply statutory pre-emption rights in relation to the issue of the Placing Shares. Unless revoked, varied or extended, such resolution shall cease to have effect on the date of the next Annual General Meeting or 31 July 2011, whichever is the earlier.

In accordance with section 571(5) of the Act, the Directors believe that the proposed disapplication of pre-emption rights as detailed in Resolution 2 will be necessary in order to carry out the Placing, which is to be effected at the Placing Price.

Resolution 3 - general disapplication of pre-emption rights

Resolution 3 is a special resolution which, subject to the passing of resolutions 1 and 2, extends the authority previously granted to the Directors at the Company's 2010 Annual General Meeting to allot shares in the Company up to a nominal value of £100,963 as if statutory pre-emption rights did not apply (such that the Company may, in accordance with institutional investor guidelines, issue approximately 10% of the Enlarged Issued Share Capital without such pre-emption rights applying). Before any exercise of the authority sought under this resolution, the Company would consult its Nominated Adviser regarding the terms and conditions of any issue. Unless revoked, varied or extended, such resolution shall cease to have effect on the date of the next Annual General Meeting or 31 July 2011, whichever is the earlier.

Appendix

 DEFINITIONS

In this announcement, the following expressions have the following meanings, unless the context requires otherwise: