Acquisition

RNS Number:6454T
Elektron PLC
24 December 2003


FOR IMMEDIATE RELEASE                                          24 December 2003


                                  ELEKTRON PLC

       Acquisition of business and assets of Arcoelectric (Holdings) plc


Elektron Plc (the "Company" or "Elektron"), the AIM quoted components and
electronics group, announces that it has acquired the trade and certain assets
from the Receiver of Arcolectric (Holdings) Plc  ("Holdings") and Arcolectric
Switches Plc ("Switches"), together ("Arcolectric").  Arcolectric is a
manufacturer of electromechanical components.


The Acquisition


Elektron has acquired from the Receiver the plant, machinery, fixtures,
fittings, tooling and stocks sufficient to continue the business of Switches.
Switches operates from an 80,000 square foot facility in Surrey employing 170
staff. The Company manufactures appliance switches, indicator lights and
fuseholders for use in domestic appliances and industrial applications.


Switches reported an operating profit of #19,000 on turnover of #13.9 million in
its last audited accounts to 31 December 2001.  Unaudited accounts for the year
ended 31 December 2002 show an operating loss of #242,000 on sales of #14.2
million. In the ten months to 31 October 2003, Switches management accounts show
an operating loss of #1.4 million on sales of #12.3 million. Since the
appointment of the Receiver, Switches' annual salary costs have been reduced by
#2.0 million.   The premises are being leased for a period of ten years with a
five-year break clause at an annual rental of #417,000. Switches exports 75 per
cent. of its products to over sixty countries word-wide including the US, China
and Turkey.  At the time of acquisition Switches had an order book of #2.3
million.


Elektron has also acquired from the Receiver the entire issued share capital of
Holdings' US distribution subsidiary ("Holdings Inc"), and 99 per cent. of
Holdings' manufacturing subsidiary in Tunisia ("Holdings Tunisie"). Elektron has
an option to purchase 100 per cent. of Holdings' subsidiary in Hong Kong
("Holdings Hong Kong") which owns a Chinese manufacturing facility.


Holdings Inc operates from a leasehold premises of 12,500 square foot in
California with a rent of US$90,000 per annum distributing Switches' products.
Holdings Inc employs ten staff and in the year ended 31 December 2002 made
audited operating profits of US$391,000 on sales of US$4.4 million.  In the 11
months to 30 November 2003 management accounts showed US$497,000 operating
profit on sales of US$4.4 million and adjusted tangible net assets of
US$300,000.


Holdings Tunisie operates from a leasehold premises in Tunisia of 30,000 square
feet with a rent of TND 120,000 per annum (#1: TND2.17) per annum and employs
300 assembly staff manufacturing products for Switches.  In the year ended 31
December 2002 Holdings Tunisie's unaudited accounts showed an operating loss of
TND31,000.  Management accounts for the ten months to 31 October 2003 show an
operating loss of TND155,000.


Holdings Hong Kong operates from a 42,000 square foot leasehold premises in
Shenzen, China assembling Switches products mainly for sale in Far Eastern
markets and employs 200 staff.  For the 21 months to 31 December 2002 Holdings
Hong Kong's audited accounts showed an operating loss of HK$3.1 million (#1:
HK$13.69).  Management accounts to 31 October 2003 showed an operating loss of
HK$503,000.


Consideration


The total consideration payable to the Receiver of Holdings and Switches
comprises #352,000 in cash and the assumption by Elektron of #1,515,000 of lease
finance debt repayable over five years to be secured by a floating charge over
the assets purchased from Switches.


Funding


The acquisition of Arcolectric together with its working capital requirements
are being funded from the following sources:


* The acquisition of Aridmark Limited from Panther Securities Plc
("Panther") for a consideration of 9,090,909 new Elektron ordinary shares of 5p
each of the Company, pursuant to the five year authority granted by shareholders
on 12 July 2000, to be issued at a price of 5.5p each.  Aridmark Limited is a
company with an issued share capital of #500,000 and cash of #500,000 and has
not traded since incorporation.  The issue is conditional upon admission of the
consideration shares to trading on the Alternative Investment Market of the
London Stock Exchange ("AIM").


Following the issue of the shares for the acquisition of Aridmark Limited,
Panther Securities will hold 13.96 per cent. of the enlarged issued share
capital.


* A loan from Panther of #975,000 to be released at the option of Panther
or Elektron. Elektron has exercised its option for release from the loan in
return for rental on Switches' UK leasehold premises in Surrey being #417,000
per annum.


* Negotiations are at an advanced stage to raise an additional  #600,000
in new equity on substantially the same terms as for Aridmark Limited.


Reasons for acquisition


The Board of Elektron believes that that acquisition of Arcoelectric is a unique
opportunity to acquire a substantial business at a low price from a receiver
with extensive market, manufacturing and distribution synergies between
Arcolectric and Elektron' s existing subsidiary, Bulgin Components.


For further information please contact:

Adrian Girling                                   Christopher Leigh
Executive Chairman                               Finance Director
Elektron Plc                                     Elektron Plc
Tel: [phone]                               Tel: [phone]



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