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  • Aquisition

11th December 2002

The Board of Mears Group PLC ('Mears') is pleased to announce that it has today agreed to purchase the entire share capital of M & T Group Limited (the 'Acquisition') who trade as FWA Southern Limited and Haydon Building Contractors Limited ('M & T Group').

The M & T Group is based in Southampton and provides a range of maintenance services to the public sector primarily building maintenance and painting services. Major customers include Poole Borough Council and Portsmouth City Council.

Michael Turl and his family own 100% of the share capital of the M & T Group. Michael Turl, who was a founder Director of Mears, is a non-executive director of a subsidiary of Mears (Haydon & Company Limited) ('Haydon') and the M & T Group has carried out sub-contract work for Haydon. As a consequence of the above, the Acquisition of M & T Group is classified as a related party transaction under the AIM Rules.As required by Rule 12 of the AIM Rules, the Directors consider, having consulted with Old Mutual Securities ('OMS'), the Company's nominated adviser, that the terms of the Acquisition are fair and reasonable in so far as the Company's shareholders are concerned.

The maximum consideration for the Acquisition is £3,500,000 ('Consideration'), an initial payment of £815,000 is payable in cash immediately, the balance of the purchase price being paid in cash by annual instalments over a four year period commencing April 2003.

The Consideration has been agreed on the basis of targeted levels of post-tax profit for the financial years ending 31 December 2002 to 31 December 2005 inclusive. The Consideration is subject to clawback if target aggregate post tax profits of £1,124,000 for the four year period are not achieved. In addition, each instalment is subject to a clawback on a proportionate basis if interim post tax profit targets for each of the relevant financial years are not met.

Further, the Consideration is subject to reduction if the tangible net assets of the M & T Group as at 30 November 2002 do not equal or exceed £315,000.

For the year ended 31st December 2001 M & T Group had a consolidated turnover of £5,133,699 and profits before interest and tax of £138,758. The net assets of the Group were £493,334.Commenting on the Acquisition, Mears Chairman, Bob Holt, said:

'I am delighted that the Acquisition will increase our geographical coverage of the social housing market and will bring considerable service sector expertise at senior management level'.Enquiries:

Bob Holt, Chairman

01453 511911

David Robertson, Finance Director

01453 511911

Richard Welton, Old Mutual Securities

0121 710 4501