Acquisition & Trading Update

RNS Number:9458G
TripleArc PLC
4 January 2005

                                                                 4 January 2005

                  TripleArc Plc ("TripleArc" or the "Company")

           Acquisition of HFS Projects Limited and update on trading

TripleArc, the UK based provider of technology led print procurement solutions,
announces the acquisition of a leading UK direct mail fulfilment company to
complement its existing services and an update on trading for the year ended 31
December 2004.

Acquisition of HFS Projects Limited

On 31 December 2004 TripleArc completed the acquisition of the entire issued
share capital of HFS Projects Limited ("HFS"), a leading UK direct mail
fulfilment company which trades as StreamGWC and Stream Direct Communications
(the "Acquisition"). HFS employs around 240 staff at operations in Swindon and
Cirencester and delivers 'data-centric' marketing support and fulfilment
services to a blue-chip client base in the automotive, mail order, publishing,
financial services, charity and leisure sectors. These services encompass data
management and processing, response management services such as inbound and
outbound call handling and personalisation of statements and laser printed
direct marketing material.

HFS was established in April 2004 to acquire the business of Brann Direct
Communications Limited. In November 2004, HFS acquired from administration the
business and certain assets of GWC Group Limited ("GWC"), another marketing
support services business. The enlarged business is being rebranded StreamGWC.
In the six months to 31 October 2004, unaudited management accounts show that
HFS generated turnover of #3.6 million and operating profits of #0.07 million.
In the year ended 31 August 2003, GWC generated turnover of #9.8 million and
operating losses of #0.53 million.

The initial consideration for the Acquisition of #639,000 has been satisfied by
the issue to the vendors of 3,247,776 new TripleArc ordinary 5p shares
("Ordinary Shares"), valued at 19.675p each based on the average mid-market
closing price for the 20 dealing days up to and including the second dealing day
prior to completing the Acquisition. Application will be made for these new
Ordinary Shares to be admitted to trading on AIM. TripleArc now has 204,269,126
Ordinary Shares in issue.

Additional consideration of up to a further #8 million (the "Additional
Consideration") may become payable for the Acquisition dependent upon the
performance of HFS over the 2-year period to 31 December 2006. The Additional
Consideration will be calculated by applying a variable multiple to the average
profits before tax and amortisation ("PBTA") of HFS in the financial years
ending 31 December 2005 and 2006. The applicable PBTA multiple is capped at 3.2
times and for the vendors to earn the maximum Additional Consideration, HFS must
achieve average PBTA of #2.5 million over the 2005 and 2006 financial years.

The first #0.5 million of any Additional Consideration will be satisfied by the
issue of new Ordinary Shares with the following #2.5 million satisfied by the
issue of bank guaranteed loan notes. Any further Additional Consideration will
be satisfied, at TripleArc's option, by the issue to the vendors of new Ordinary
Shares or of bank guaranteed loan notes.

It is intended that HFS will rationalise its operations onto its Swindon site
and will form the data management and fulfilment division of the TripleArc Group
(the "Group"), a separate trading arm delivering a range of additional services
which are complementary to the Group's existing operations and enabling the
provision of an expanded and improved service offering to clients. The added
value services that HFS will provide to the Group will assist in the development
of new business opportunities for large 'data-centric' print fulfilment
contracts. The current senior management team of HFS, all of whom are vendors,
will be retained.

Trading Statement

The Directors of TripleArc, anticipate that the Company's results for the year
ended 31 December 2004 will be slightly below market expectations.

The implementation during 2004 of TripleArc's proprietary software and other
operating platforms across the Group diverted some Technology Division resources
away from their main focus of generating external revenue. As a result revenues
from the Technology Division during 2004 were lower than expected. This systems
implementation is now substantially complete and the Board is confident that the
Group will obtain significant benefits from the common technology platforms now
in place, and it has already been a key aspect in assisting the Group to win new
business. As the Company refocuses on external technology sales, the Board is
confident that the Company's strengthening relationship with Four51, Inc, its US
technology distribution partner, will provide additional opportunities for
growth outside of the UK.

In addition, the Company won a number of significant new print management
contracts during 2004. Whilst overall sales margins are ahead of initial
expectations, the achievement of full scale revenue generation on certain new
contracts took longer than originally anticipated. Whilst these timing delays
have impacted on the Company's 2004 financial performance, the Board fully
expects the Company to generate the revenues anticipated from these contracts
for the current financial year.

Jason Cromack, Chief Executive, commented: "The Board believes that the
operational achievements over 2004 leave the Company in a very strong position
to capitalise on the growth opportunities available in the print management
sector, both organic and acquisitions led, in the current year and beyond. The
outturn for 2004 will be slightly below expectations but does not fully reflect
the foundations for growth we have established at the Group. The benefits the
acquisition of HFS brings to TripleArc are compelling as we will be able to
increase both our service offering and margins as we look to cross sell our
products. This strategic fit will enable TripleArc to offer more services to
clients and will complement our existing offering.

"The Board is confident that it can drive shareholder value and believes that
the acquisition of HFS will add to the opportunities available to TripleArc. The
Board views the future with confidence."

For further information please contact:

TripleArc Plc                                                  0117 933 1000
Jason Cromack, Chief Executive Officer

Weber Shandwick Square Mile                                    020 7067 0700
Terry Garrett / Nick Dibden





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