Acquisition

Glen Group PLC
20 January 2006


                                 Glen Group plc
                    Acquisition of Eclectic Holdings Limited

Glen Group plc, ('Glen') the Edinburgh based value added reseller of integrated
IT and communication services, today announces that it has agreed to acquire
Eclectic Holdings Limited ('Eclectic'), subject to shareholder approval.

Deal Highlights:

   •Initial consideration in cash and shares £2,212,500
   •Additional consideration of up to £787,500 dependent on adjusted results
    of Eclectic for their year ended 31 July 2006
   •Placing of 250,000,000 shares to raise gross proceeds of £2,500,000
   •Under the AIM rules, the acquisition constitutes a reverse takeover and
    Glen is obliged to apply for re-admission of the existing ordinary shares
    and admission of the new ordinary shares to trading on AIM
   •EGM on 13th February 2006 with re-admission and dealings expected to
    commence on 15th February.

Commercial highlights:

   •Eclectic is a value added reseller of IT services operating in the
    corporate market
   •Based in Glasgow and London, Eclectic is a specialised organisation of
    business intelligence technology professionals
   •Eclectic provides consultancy, implementation and training services to
    its customer base throughout the UK which includes a number of blue chip
    clients
   •Craig Saunderson to become Managing Director of Glen Communications
    Limited, the SME focused IT and communications subsidiary


Commenting on the acquisition Eric Hagman CBE, Chairman of Glen, said:

'The acquisition of Eclectic is a significant step in our ambitions to grow into
a powerful player in the added value information technology and communications
sector. Eclectic gives us a valuable foothold in the corporate market and in the
provision of specialised services to a blue chip client base. '


For Further Information:

Glen Group plc
Graham J Duncan, Chief Executive Officer                  0845 119 2102

College Hill
Alex Walters                                              020 7457 2020





Introduction

The Board of Glen is pleased to announce that terms have been agreed for the
conditional acquisition of the Eclectic Group for an initial consideration of
£2,212,500 to be satisfied by the payment of £1,950,000 in cash to the Vendors
and the Employee Shareholders and the issue to the Vendors and the Employee
Shareholders of the 7,683,077 First Consideration Shares.

Depending on the profit before interest, taxation and goodwill amortisation
('PBITA') of Eclectic for the year ending 31 July 2006, a further sum of up to
£787,500 will be paid to the Vendors and the Employee Shareholders to be
satisfied by the issue of the Second Consideration Shares, at a price equal to
the average offer price of Ordinary Shares in the three trading days preceding
the day before the date of the issue of Glen's results for the year ending 30
September 2006 and in certain limited circumstances in cash.

The Board further announces the terms of a Placing to raise approximately
£2,500,000 (before expenses) to fund the cash element of the Acquisition and the
expenses of the Acquisition and of the Placing, and to provide additional
working capital for the Enlarged Group.

Under the AIM Rules, the Acquisition of the Eclectic Group constitutes a reverse
takeover and, as such, Glen is obliged to apply for re-admission of the Existing
Ordinary Shares and admission of the New Ordinary Shares to trading on AIM.

The Acquisition and the Placing are conditional, inter alia, upon the passing of
the Resolutions to be proposed at the Extraordinary General Meeting, and upon
Admission.

Information on the group

The Company is a holding company for Glen Communications which manages SME
customers across a wide range of IT and communication products and services. Its
ethos is to operate as a one-stop-shop for SMEs IT and communications services
and to act as an integrator of these services. Glen Communications operates as a
value added reseller and focuses on the provision of business to business mobile
solutions, both voice and data, internal IT infrastructure solutions and the
sale and support of certain software solutions, particularly CRM, seeking to add
value to the customer through the application of consultancy
and implementation skills. Glen focuses on IP technologies, seeking to
capitalise on the increasing utilisation of broadband.

The Group has identified Eclectic as a way to gain access to the important
corporate market. As well as being a significantly larger company which should
enhance the stability of the Group, the Directors believe that Eclectic is a
company with a potential for significant growth, organically and by acquisition,
and recognise that Eclectic's management team has the skills and experience
necessary to achieve this objective within the corporate marketplace. The
Directors believe that the Eclectic Group is therefore a good fit alongside its
SME brand, Glen Communications.

Information on Eclectic

Eclectic is a niche provider of specialist IT and business consultants to the
corporate market. Its position in the market is of a specialised supplier of
business intelligence consultancy and implementation services, including
Business Objects(TM) and Oracle(TM) technologies. Eclectic also has an IT 
training division and was recently placed as number 47 in the Top 50 UK IT 
Training Providers (Source: IT Training Magazine, July/August 2005).

Eclectic was established in Glasgow in June 2000 to carry on a training business
previously operated by a listed plc. Since then Eclectic has established itself
as a niche provider of business intelligence consultancy. Eclectic operates a
similar business model to Glen as a value added reseller. Eclectic also provides
authorised training with OracleTM, Business ObjectsTM and Sun MicrosystemsTM.

Eclectic has historically had a strong presence in Scotland and has a blue chip
customer base. As well as operating from its Glasgow headquarters, it also has a
training facility in Edinburgh and in early 2005 opened a London office.

The operating loss for the year ended 31 July 2005 of £76,000 is stated after
charging goodwill amortisation of £102,000. The major shareholder made a charge
to salary of £3,000 and consultancy fees were paid to a business operated by the
major shareholder of £71,000, which will cease following the completion of the
Acquisition. If these items had been excluded, the Eclectic Group would have
reported an operating profit of £100,000.

Terms of the acquisition

Under the terms of the Acquisition Agreement, Glen has conditionally agreed to
acquire the entire issued share capital of Eclectic and Eclectic Resourcing. The
consideration for the Acquisition is the issue to the Vendors and to the
Employee Shareholders of the First Consideration Shares and £1,950,000 in cash.
In addition a further sum, which will be satisfied by the issue of Second
Consideration Shares, will be paid to the Vendors and Employee Shareholders
based on the PBITA of Eclectic Group for the year ending 31 July
2006:

PBITA of £250,000 up to and including £299,999, the issue of Second
Consideration Shares to the value of £196,875;

PBITA of £300,000 up to and including £349,999, the issue of Second
Consideration Shares to the value of £393,750;

PBITA of £350,000 up to and including £399,999, the issue of Second
Consideration Shares to the value of £590,625; and

PBITA of £400,000 or more, the issue of Second Consideration Shares to the value
of £787,500.

The price at which the Second Consideration Shares are to be issued will be the
average offer price of the Ordinary Shares in the three trading days immediately
preceding the day before the date of the preliminary amount of the Company's
results for 2006.

Certain employees of the Eclectic Group hold options to acquire shares in
Eclectic. It is envisaged that each of these employees will, prior to
Completion, exercise his or her right to purchase shares in Eclectic.

Under the Acquisition Agreement the Vendors have given warranties to the Company
in respect of the business and affairs of the Eclectic Group and have given a
tax indemnity.

Application will be made to the London Stock Exchange for admission of the
Placing Shares and the First Consideration Shares to be admitted to trading on
AIM. The Placing Shares and the First Consideration Shares will rank pari passu
with the Existing Ordinary Shares including the right to receive all dividends
and other distributions declared, made or paid after Admission. Dealings in the
Placing Shares and in the First Consideration Shares are expected to commence on
15 February 2006.

The Acquisition is conditional, inter alia, on Shareholder approval of the
Resolutions to be proposed at the EGM.

Immediately following Admission, the Directors intend to hive up Eclectic Group
Limited, the operating company of the Eclectic Group, as, to qualify for EIS
relief, the qualifying trade should be carried on by a direct subsidiary of the
Company

Directors

The Glen Group board will remain unchanged immediately following Admission.

Eric Martin Hagman CBE CA, Non-Executive Chairman. Aged 59
Eric Hagman retired from the UK practice of Andersen in April 2002 after 32
years with the firm. He was latterly UK Senior Partner for Global Markets, and
over the years held a number of senior positions including Regional Managing
Partner. Eric Hagman received a CBE in the 2003 Queen's Birthday Honours and is
currently the Non-Executive Chairman of AON Limited's Risk Services division in
Scotland, a Non-Executive Director of British Polythene Industries plc, Celtic
plc, Scottish American Investment Company PLC and a Board member of the Royal
College of Art in London. He is a former member of the Council of CBI Scotland
and of the Boards of Scottish Enterprise and Scottish Financial Enterprise.

Graham John Duncan MA CA, Chief Executive Officer. Aged 54
Graham J Duncan is the Group's founder and Chief Executive. After graduating he
trained to become a Chartered Accountant and qualified in 1975. He left the
profession in 1984 to become a director of the company which had been awarded
the franchise for broadband cable in the city of Aberdeen. After ten years of
growth both organically and by acquisition the group, later renamed Atlantic
Telecom Group PLC, listed its shares on the Official List in London in January
1995. Over the next several years, prior to it being placed into administration
and into compulsory liquidation, Atlantic grew rapidly and by 2000 it was
building or operating 'last mile' networks in three European countries,
employing over 1,100 people. Within the last five years, Graham J Duncan has
also been Non-Executive Chairman of AIM listed Host Europe PLC (subsequently
acquired by Pipex Communications plc) and a Non Executive Director of two quoted
investment trusts.

Peter James Ford, Non-Executive Director. Aged 48
Peter Ford joined the family business of Ford's the Bakers in 1976. Ford's the
Bakers was sold to Lynedale Foods in 1999. Peter Ford has been, in recent years,
an investor in a number of companies in Scotland and has held directorships with
Paragon Products (UK) Ltd, East Lothian Economic Developments Ltd (now called
East Lothian Investments Limited), Thomas James Developments Ltd, and Zentel
Telecom Group PLC. More recently he has been acting as an advisor to a number of
businesses in the food sector. In 1999 he was elected as a member of East
Lothian Council, a position that he still holds.

Operating Subsidiary Companies

At completion of the acquisition of Eclectic, the boards of Glen Communications,
Eclectic and Eclectic Group Limited will be reorganised in order to deliver the
focus required to build the business.

Glen Communications

The Board of Glen Communications already consists of Graham J Duncan and Peter J
Ford as a Non- Executive Director. Craig Saunderson, who joined Glen
Communications in May 2005 as Head of Sales, will become Managing Director of
Glen Communications. In addition to his role in Glen, Graham J Duncan will
become Chairman of Glen Communications.

Craig Ian Saunderson, Managing Director, Glen Communications. Aged 31
Craig Saunderson has over 15 years of experience in selling IT and Communication
solutions into both SME and Corporate markets. In his previous position at
Enline plc, he secured major business from organisations such as Network Rail,
Diageo, BAE Systems, Virgin Atlantic and Pinsent Masons. Beyond these
achievements, Craig Saunderson has experience in developing and growing sales
teams.

Eclectic

At completion of the acquisition of Eclectic, the board of each Company in the
Eclectic Group will consist of Graham J Duncan, as Chairman, Peter J Ford as a
Non-Executive Director and the current Managing Director, John Nicoll. A brief
biography of John Nicoll is shown below.

John Nicoll, Managing Director, Eclectic. Aged 50
John Nicoll holds a BSc (Honours) in Engineering. He started with James Howden
and Co as a graduate trainee in 1978 and in 1982 joined Hewlett Packard as a
sales representative. His sales career with that company spanned sixteen years
including three years as general sales manager responsible for various
sectors including oil and gas, utilities and financial services. He was also
responsible for Hewlett Packard's consultancy practice. In 1997 he joined SAS
Institute as general manager where market sectors included insurance,
manufacturing, public sector and utilities with applications including CRM and
business intelligence solutions supporting e-commerce activities. After two
years as business development director with Performix Technologies, a new
software company, he joined Eclectic Group in 2003 with a brief to develop the
consultancy services business. He became Managing Director of Eclectic Group in
May 2005.

Current trading, recent trends and prospects

The results for the Group for the year ended 30 September 2005 were announced on
20 December 2005. The Group is currently loss making as a result of the
continuing investment in the expanded sales force. As a value added reseller,
the number of sales people employed coupled with the success of each sales
person in delivering a meaningful contribution to the business has a direct
impact on profitability and the Directors believe that this remains critical to
the success of the business. Since the year end, trading has been in line with
expectations. Since 31 July 2005, Eclectic Group has been trading profitably on
an accumulated basis and trading is in line with expectations.

Details of placing

The Company is proposing to raise £2.5 million (£2.06 million net of expenses,
excluding VAT) through a placing by Seymour Pierce Ellis of 250,000,000 New
Ordinary Shares at 1 pence per share to certain persons, including the directors
and persons connected with them.

The Placing Shares will represent approximately 76.29 per cent. of the Enlarged
Share Capital of the Company on Admission. On Admission, it is expected that the
Company will have a market capitalisation at the Placing Price of approximately
£3.28 million.

Under the Placing Agreement, Seymour Pierce Ellis has agreed, as agent for the
Company, conditional, inter alia on Admission to use its reasonable endeavours
to procure subscribers for the Placing Shares at the Placing Price or subscribe
itself for these shares. The Placing Shares will rank pari passu in all respects
with the Existing Ordinary Shares. The Placing Agreement contains provisions
entitling Seymour Pierce Ellis to terminate the Placing Agreement at any time
prior to Admission in certain circumstances. If this right is
exercised, the Placing will lapse and the Acquisition will not take place.



Use of proceeds

The proceeds of the Placing net of the total anticipated costs and expenses of
the Acquisition, Placing and Admission will be approximately £2.02 million which
will be applied principally as follows:
£1,950,000 to fund the cash element of the consideration payable on Completion;
and 
£70,000 towards the general working capital of the Enlarged Group.

Share Option Scheme

The Enlarged Group is taking the opportunity to adopt the proposed Company EMI
Scheme. The Board believes that such a scheme is desirable in order to assist
the Enlarged Group in recruiting and retaining both directors and employees
recognising the fact that, as a relatively small organisation, the size of the
Enlarged Group may not allow it to be able to match salary levels paid
elsewhere.

Subject to the passing of the Resolutions, it is proposed that any further
options that are granted after Admission will be granted under the proposed
Company EMI Scheme, approval for which is being sought from Shareholders. The
Board intends, subject to the passing of the Resolutions, that Mr Duncan will be
awarded share options over 10,000,000 Ordinary Shares at the Placing Price,
exercisable after 15 February 2009, partly at the discretion of the Board and
partly in accordance with performance criteria to be determined by the
remuneration committee of the Board.

In addition, the Company has granted unapproved options to acquire 666,667
Ordinary Shares (equal to 0.20 per cent of the Ordinary Shares in issue on
Admission) to Eric M Hagman at an exercise price of 3 pence per share. It is
proposed that options will be granted pursuant to the proposed Company EMI
Scheme over shares representing not more than 10 per cent. of the Company's
issued share capital from time to time.

Lock-up undertakings

Immediately following Admission the Directors, Vendors and Employee Shareholders
will be interested in aggregate in 48,954,654 Ordinary Shares, representing
approximately 14.94 per cent. of the Enlarged Share Capital.

Each of the Directors, Margaret Duncan and Duncan Ventures Limited has
undertaken to the Company, Seymour Pierce Ellis and Seymour Pierce (subject to
certain limited exceptions, including disposals by way of acceptance of a
recommended takeover offer for the entire issued share capital of the Company)
not to dispose of the Ordinary Shares held by each of them following Admission
or any other securities (or any interest in them or in respect of them) at any
time prior to the end of the Lock-in Period without the prior written consent of
the Company, Seymour Pierce Ellis and Seymour Pierce.

Furthermore, each of the Directors, Margaret Duncan and Duncan Ventures Limited
has also agreed, for a period of twelve months following the expiry of the
Lock-in Period to certain orderly market arrangements and to only dispose of
their Ordinary Shares through Seymour Pierce Ellis, provided that it shall
remain broker to the Company.

Each of the Vendors and certain of the Employee Shareholders has undertaken to
the Company, Seymour Pierce Ellis and Seymour Pierce (subject to certain limited
exceptions, including disposals by way of acceptance of a recommended takeover
offer for the entire issued share capital of the Company) not to dispose of the
First Consideration Shares held by each of them following Admission or the
Second Consideration Shares held by each of them following the Second Completion
or any other securities (or any interest in them or in respect of them) at any
time prior to the end of the Lock-in Period or Second Lock-in Period (as the
case may be) without the prior written consent of the Company, Seymour Pierce
Ellis and Seymour Pierce.

Furthermore, each of the Vendors and certain of the Employee Shareholders has
also agreed for a period of twelve months following the expiry of the Lock-in
Period or, as the case may be, the Second Lock-in Period, to certain orderly
market arrangements and to only dispose of their Ordinary Shares through Seymour
Pierce Ellis, provided that it shall remain broker to the Company.

The Extraordinary General Meeting

The approval of the Shareholders is required to implement the Acquisition as,
under the AIM Rules, the Acquisition is classified as a reverse takeover
requiring shareholder approval. Furthermore the issue of the New Ordinary Shares
requires the Company to: increase its authorised share capital; authorise the
Directors to allot the Placing Shares and the Consideration Shares pursuant to
the Placing and the Acquisition without first offering the Placing Shares and
the Consideration Shares to the holders of Existing Ordinary Shares as would
otherwise be required under the Act; and, to authorise the Directors to allot
New Ordinary Shares under the proposed Company EMI Scheme.

The Extraordinary General Meeting has been convened for 2.30 p.m. on 13 February
2006.




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