SERCO GROUP PLC - RCI Holding Corporation

SERCO GROUP PLC - RCI Holding Corporation



           Serco completes acquisition to enhance US market position           

Serco Group plc ("Serco") today (21 March 2005) announces that, having obtained
all necessary regulatory approvals, it has completed the $215m (£113m*)
purchase of US-based RCI Holding Corporation ("RCI").

RCI is a leading supplier to the US Federal Government. This acquisition
significantly increases Serco's competitive position in the world's largest
service contracting market.

RCI's key services include IT services, systems engineering, strategic
consulting and HR focused business process management. Its primary market - the
Department of Defense - represents the largest portion of Federal spending,
accounting for more than 75 per cent of total contract amounts.

RCI brings enhanced technology capabilities to Serco North America. Its strong
customer relationships with the US Federal Government complement Serco North
America's predominantly state and local customer base. In addition, RCI
provides Serco with deep understanding of the various contracting models used
by US Federal authorities.

Serco will integrate RCI with its existing North American operations and the
enlarged business will have the critical mass to compete more effectively with
larger tier-one service providers in the US and provides a strong platform to
promote Serco's global capabilities. The inclusion of RCI, with expected
revenues in 2004 of $289m, more than doubles Serco's North American turnover.

RCI was acquired for cash, on a debt free basis, and is expected to be earnings
accretive for Serco in 2005.

Serco Chief Executive Christopher Hyman said: "North America is one of our
chosen markets. Opportunities in the Federal market are substantial for
companies with proven capabilities and qualifications and the US government
intends to further increase the purchase of contracted services. This
acquisition will give us deeper and broader access and will enable faster and
more profitable growth."

* All US dollar amounts converted at $1.90 to £1

                                   - Ends -                                    

For further information, please contact:

Serco Group plc [phone]

Dominic Cheetham, Corporate Communications Director

Richard Hollins, Head of Investor Relations

Notes to editors:

Serco is one of the world's leading service companies. It helps national and
local governments and commercial clients around the world improve their
services by successfully managing organisational design and change.



END



DATASOURCE: SERCO GROUP PLC

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