Acquisition

RNS Number:3646U
XKO Group PLC
19 January 2004


FOR IMMEDIATE RELEASE               19 January 2004


XKO GROUP plc




                     XKO GROUP plc ("XKO" or "the Company")

              ACQUISITION OF DISASTER RECOVERY BUSINESS AND ASSETS



The Board of XKO is pleased to announce the acquisition of certain trading
assets and business activities from Datacentre Limited, a private company
operating primarily on the Isle of Man, for an aggregate consideration of #1.7
million.



The assets and activities being acquired relate primarily to the provision of
high specification Disaster Recovery and contracted infrastructure support
services.  The Disaster Recovery services are delivered to financial services
corporates under medium term contracts supported by a high level of fixed
capital investment and support staff.  XKO is acquiring the ongoing Disaster
Recovery contract base and the related asset base with a view to providing an
enhanced service to customers and long term certainty of supply.



The acquisition has enabled XKO to acquire well invested Disaster Recovery
facilities in both the Isle of Man and the Channel Islands.  The financial
services and Government Division of XKO has traded successfully for many years
in the Channel Islands and Isle of Man and the acquisition of these key
facilities should greatly enhance our market share and service provision to
customers.



Contracted revenues acquired, on either annual or multi year contracts are
approximately

#1.6 million per annum.  The balance of revenues being acquired, amounting to
approximately #2.5 million represents the sale of software and IT infrastructure
design and build.  The consideration of #1.7 million is payable as to #800,000
in cash and the Company assuming debt relating to some of the assets acquired
which is estimated to be #900,000.   The assets being acquired will have an
approximate book value of #1 million and the directors of XKO estimate that the
assets and businesses to be acquired generated an operating profit of
approximately #100,000 based on standard accounting principles, during the year
ended 31 December 2002.



XKO expects to incur exceptional integration costs of some #200,000, primarily
in the current financial year to 31 March 2004.  It is expected that the
majority of this expenditure will be related to a cost reduction exercise and
securing integration benefits.



The Board believes that the acquisition will be immediately earnings enhancing
before any exceptional costs as well as contributing significantly to the
strategic development of the Group's services operations.



The funding for the acquisition has been provided by The Royal Bank of Scotland
through an increase of the Group's term loan facilities.



Commenting on the acquisition the Chief Executive, Simon Beart said:



"This acquisition underlines our commitment to servicing our Government and
Financial Services customers and our determination to provide customers with all
the services they require.  The provision of Disaster Recovery is now a core
part of our extended offering and we will be looking for further opportunities
in this area."







Enquiries
Simon Beart             Chief Executive                     07710 444 370
Rob Collins             Evolution Beeson Gregory            020 7071 4311
Richard Darby           Buchanan Communications             020 7466 5000
Mike Sawbridge          Teather & Greenwood                 0151 242 0610




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