Acquisition and Placing

RNS Number:7060T
Asfare Group plc
07 November 2005

Press Release                                            7 November 2005

                                Asfare Group plc

                          ("Asfare" or "the Company")

                Acquisition of Todd Research Limited and Placing


The directors of Asfare, a leading specialist supplier of high quality products
and services supplying the Emergency Services market, are pleased to announce
the agreement to, and the exchange of, the sale and purchase agreement for the
acquisition of the whole of the issued share capital of Todd Research Ltd
("Todd"). Final completion of the acquisition is expected to occur this month.
Todd will be acquired for an initial consideration of #1,650,000, plus an amount
equal to the cash balance in the business on completion (currently #170,000) and
a further deferred consideration of up to #2,080,000.

Todd is involved in the design, manufacture and supply of x-ray apparatus
designed primarily for the interception of suspect mail. Todd operates from
freehold premises in Chelmsford, Essex and has a blue chip client base including
the Foreign and Commonwealth office, Shell UK, Exxon Mobil, Johnson and Johnson,
Lloyds TSB and Scottish Widows with sales in over 80 countries.

Todd, which was established in 1947, is being acquired from its controlling
shareholder, Michael Lambarth. Michael Lambarth and sales director Sandra Downs
will both retire after a brief handover period.

For the year ended 31st January 2005 Todd reported turnover of #1,896,891 and
profit before taxation of #110,815. Profit before interest and tax, as adjusted
for Directors remuneration and one-off pension payments, was #506,000 for the
year.

Net assets of Todd at 31st January 2005 were #765,099, including a freehold
property at book value of #522,726 which was re-valued in October 2005 at
#1,250,000. Including this revaluation surplus, net assets would have been
increased at 31st January 2005 on a pro forma basis to #1,492,373.

The consideration for Todd will be as follows:

1. An initial payment of #1,650,000 satisfied in cash at completion plus an
   amount equal to the cash balance in Todd estimated at #170,000.

2. A payment of #80,000 in cash on achievement by Todd of at least #1,700,000 of
   revenues in the current Todd financial year to 31st January 2006.

3. Deferred consideration capped at #2,000,000 which will be payable in a
   mixture of cash and shares over two years upon finalisation of each year's
   revenue:

   *   Deferred consideration will be based on Todd's sales.
    

   *   For the first 12 months following completion the vendors will
       receive, 75p for every #1 of sales above #2,250,000 subject to
       certain adjustments depending on the gross margin achieved. The
       total possible deferred consideration for the first 12 months
       will be capped at #1,000,000, with the consideration being
       satisfied by #750,000 in cash and #250,000 in shares valued at
       90p.

   *   For the second 12 months following completion the vendors will
       receive, 75p for every #1 of sales above #2,600,000 subject to
       certain adjustments depending on the gross margin achieved. The
       total possible deferred consideration for the second 12 months
       will be capped at #1,000,000, with the consideration being
       satisfied by #750,000 in cash and #250,000 in shares valued at
       90p.

Todd will be acquired on a debt free basis. The directors of Asfare expect that
a substantial portion of any deferred payments will be met from cash generated
by the increased level of Todd's sales needed to generate such earn-out
payments.

The acquisition of Todd will reflect the Board's strategy to diversify the
Group's product portfolio by acquiring complementary businesses within the
homeland security sector. The sector is effectively divided into two areas:
Detection & Protection, and Fire, Search & Rescue. Asfare's existing product
portfolio is targeted at Fire, Search & Rescue, while Todd's operations are
focused within Detection & Protection. By servicing the two areas, Asfare's
strategy aims to align its own product portfolio with an increasing drive by the
homeland security forces to provide a combined response.

The directors of Asfare believe that there is significant potential to expand
the sales performance of Todd in the current security climate. They intend to
build on the excellence of the Todd products to expand its blue chip client
base.

Tim Wightman, Chairman of Asfare, commented on the acquisition; "We are
delighted to be purchasing Todd on attractive terms both in relation to its
historic earnings and the substantial asset backing. We believe that the Todd
business can be expanded significantly in the UK and abroad by building on the
reputation of the Todd product with the support of Asfare's management."

Tony O'Neill, newly appointed CEO of Asfare, will take immediate day to day
management control of the Todd business.

To part fund the initial consideration, the Company also today announces the
placing of 771,111 new ordinary shares in the Company at 90p per share ("the
Placing Shares") to raise #694,000. Certain of the existing directors are
subscribing for in aggregate, a total of 72,222. Following the admission of the
Placing Shares to trading on AIM, the Directors will hold the following ordinary
shares in the Company:

Director                      Number of         Number of       % of issued
                         Placing Shares          Ordinary     share capital
                                                Shares on      on Admission
                                                Admission
Tim Wightman*                    33,333           532,083             10.7%
David Chisnall                        -           648,750             13.1%
Tony O'Neill                     11,111            11,111              0.2%
Tim O'Connor                     11,111            11,111              0.2%
Adrian Bradshaw                **16,667           267,917              5.4%

* Tim Wightman is interested in 158,333 of the Ordinary Shares set out against
his name by reason of his wife's beneficial ownership of those shares.

** Adrian Bradshaw is interested in 16,667 Ordinary Shares set out against his
name, held in the Bradmount SSAS pension scheme.

The balance of the initial consideration will be satisfied through new debt
facilities with HSBC secured on the Todd freehold property.

Application for admission to trading on AIM for the Placing Shares has been made
and trading in the Placing Shares is expected to occur on 10th November 2005.
The Placing Shares will, on admission to AIM, rank pari passu in all respects
with the existing ordinary shares of the Company.

Following successful completion of this acquisition, Tony O'Neill will be
allocated share options over a total of 120,295 ordinary shares and Tim O'Connor
will be allocated share options over a total of 21,872 ordinary shares, making
the total allocated share options 10% of the issued share capital. The exercise
price of these options shall be at 90p.

Enquiries:

Asfare Group plc
Tony O'Neill, Chief Executive                 Tel: [phone]
Tim O'Connor, Finance Director

Seymour Pierce
Mark Percy / John Depasquale                  Tel: [phone]

Media enquiries:
Abchurch Communications
Ariane Comstive                               Tel: [phone]
[e-mail]               www.abchurch-group.com

                                    - Ends -





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