Acquisition

RNS Number:0068H
CES Software PLC
05 January 2005

CES Software plc

January 5, 2005



CES Software to acquire leading online sports information provider, Don Best
Sports


LONDON, England - CES Software plc (the "Company" or "CES"), a leading provider
of skill gaming and exchange-betting technology, announced today that it has
entered into a conditional agreement to acquire the entire issued share capital
of Corcom, Inc. (a Nevada corporation) ("Corcom") and certain assets associated
with Corcom's business, Don Best Sports (Corcom and the associated assets are
together referred to herein as "Don Best").

Founded in 1989, Don Best (www.donbest.com) is a leading Internet sports
information provider, based in Las Vegas, Nevada, U.S.A. Its core business is
publishing exclusive, real-time wagering odds on the Internet for its Internet
subscriber base. Don Best does not accept or make wagers. It also publishes a
wide range of market-sensitive information which enables its customers to make a
more educated wager, and enjoy the ability to monitor the continuous changes in
wagering odds. Don Best also provides subscription services for live odds, major
line move alerts, urgent messages, injury reports, statistical reports, line
seeker, bet tracker, and offers full user customisation.

For the nine months ended September 30, 2004, Don Best made a loss of US$ 0.25
million on turnover of US$ 7.85 million. The loss includes certain discretionary
or other expenses, incurred during the period, that are not likely to recur
following the completion of the acquisition. These expenses are estimated by the
Company based on information provided by Don Best's management to amount to
approximately US$ 5.48 million. As at September 30, 2004, Don Best had net
liabilities of US$ 2.98 million. Adjusted for those non-recurring expenses, Don
Best's annualised, pro-forma profit before tax for the nine months ended
September 30, 2004 would have been US$ 6.968 million.

The consideration for the acquisition of Don Best is the payment to the sellers
of US$ 40 million in cash, the issuance of one million CES ordinary shares ("
Ordinary Shares") on completion, and the issuance of a maximum of one million
further Ordinary Shares pursuant to an earn-out. Under the terms of the
earn-out, the sellers will be issued one additional Ordinary Share for each US$
1 that Don Best's EBITDA, for the twelve-month period commencing on the first
day of the first full month immediately following the closing of the
acquisition, exceeds US$ 6 million. In August 2004, the sellers entered into an
agreement (the "Purchase Agreement") to sell Don Best to Celeus Capital
Corporation ("Celeus"), part of JJR Capital Partners ("JJR"), a Toronto-based
private equity firm. JJR later approached CES with the opportunity to acquire
Don Best. JJR has conditionally agreed to assign its rights in the Purchase
Agreement to CES in consideration of the issue of 2,240,000 Ordinary Shares. In
addition, CES will reimburse Celeus for US$ 1 million of expenses incurred by it
in connection with the entry into the Purchase Agreement.

The acquisition remains subject to regulatory approval, and is scheduled to be
completed no later than January 31, 2005. Application will be made for the
admission of the Ordinary Shares to be issued on the closing of the assignment
and the acquisition of Don Best to trading on the Alternative Investment Market
of the London Stock Exchange and for the listing of such shares on the Toronto
Stock Exchange.

The holders of the Ordinary Shares to be issued on closing of the assignment and
the acquisition of Don Best have agreed not to dispose of any of such shares
without the consent of the Company and its nominated adviser for a period of
twelve months following closing save for in limited prescribed circumstances
such as the acceptance of a takeover offer for the Company.

Dana Corbo, Don Best's President and CEO, and the other members of the Don Best
management team have agreed to continue to perform in their current roles and
will remain with the business following the completion of the acquisition.

The Company believes that the acquisition of Don Best will create additional
value for CES shareholders. Don Best's business complements CES' current
exchange-betting and skill-gaming divisions, and fits into CES' overall strategy
of using the Internet to create a more fun, varied and efficient gaming
experience. The acquisition is in line with CES' previously stated goal of using
strategic acquisitions to augment its distribution, product offerings and
presence in new geographic markets. The acquisition would bring a popular,
innovative product line into the CES suite of gaming-related businesses, and
represents another important step towards CES' goal of becoming a leading
participant in the regulated, online gaming marketplace.

The Company is proposing to raise up to #8 million by way of a placing of new
Ordinary Shares which is expected to close shortly after the completion of the
Don Best acquisition.  The placing will be subject to shareholder approval being
obtained to issue the relevant new Ordinary Shares and a circular convening an
extraordinary general meeting for early February 2005 at which the necessary
resolutions will be proposed will be sent to shareholders shortly. The proceeds
of the placing will be used to further develop and grow the Company's skill
gaming business and for general corporate purposes. The Company believes that an
investment in skill gaming at this time, given the growth of the business and
the market opportunity that exists in skill gaming, will provide substantial
returns to shareholders.  The Company expects to sign significant new licensees
in 2005 in its skill gaming business.

Lorne Abony, Chief Executive Officer of CES, remarked: "We believe that the Don
Best acquisition represents an enormous leap forward for the Company in terms of
its growth in new markets and new distribution channels. Our goal is to leverage
the Internet to offer more value and choice for players-and the acquisition of
Don Best is directly in line with our strategy. Furthermore, the Don Best
business is in keeping with our overall corporate goals of meaningful revenue
and earnings growth. With strong, complementary business units, we look forward
to an exciting 2005."


For more information, contact:


CES Software plc


Lorne Abony, CEO
Tel: [phone]


James Lanthier, CFO
Tel: [phone]


Tracey Irwin, Investor Relations
Tel:  [phone] x101


Panmure Gordon (a division of Lazard)


Dominic Morley
Tel:  [phone]


Catullus Consulting


Alex Mackey
Tel:  [phone]


About CES Software plc
CES Software plc ("CES") is a leading provider of person-to-person skill gaming
and exchange-betting technology. CES's strategy is to provide its cutting-edge,
person-to-person gaming systems to top, licensed distribution partners in
regulated markets around the world. CES is a public company, incorporated in
England and Wales, and is listed on the Toronto Stock Exchange under the Symbol
"FUN" and quoted on the Alternative Investment Market (AIM) of the London Stock
Exchange under the symbol "CES".


Forward-Looking Information

Except for historical information, this press release contains forward-looking
statements which reflect CES' current expectation regarding future events. These
forward-looking statements involve risks and uncertainties, which may cause
actual results to differ materially from those statements. Those risks and
uncertainties include, but are not limited to, changing market conditions, and
other risks detailed from time to time in CES' ongoing operations. We undertake
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. In light of
these risks, uncertainties and assumptions, the forward-looking events in this
press release might not occur.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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