Acquisition of NST

Holidaybreak PLC
01 October 2007


1 October 2007: FOR IMMEDIATE RELEASE


 Not for release, distribution or publication, in whole or in part, in or into
                 the United States, Canada, Australia or Japan

                                  HOLIDAYBREAK
          £47.2m acquisition of NST to grow Group's Education Division


Holidaybreak, the European specialist holiday and activity group, today
announces the acquisition of UK and Ireland educational tour organiser NST
Holdings Limited for a total cash consideration of £47.2 million. NST will be
integrated into the Group's Education Division, created earlier in the year with
the acquisition of PGL.


Summary:

  * NST is the UK's leading provider of group travel to schools and colleges
    throughout the UK. It has a strong brand name and reputation within the
    sector, enjoys long-term relationships with schools and achieves high levels
    of customer retention.
  * Established in 1967, it provides a full range of tours for schools and
    colleges all over the world. In 2006, it carried 172,000 students and
    education staff on over 4,000 trips for groups from the UK and Ireland to
    destinations in the UK, Europe and Worldwide.
  * Under the slogan 'Bringing the Curriculum to Life', NST organises trips
    for schools and colleges to the UK and destinations around the world,
    including India and China. Its specialist trips range from Media Studies
    tours to Los Angeles to Literature Visits to WW1 Battlefields.
  * NST owns Le Chateau d'Ebblinghem, a 19th century French country house 8km
    east of St. Omer in Flanders, which is used as hotel accommodation. It also
    operates activity centres in Lancashire and the Ardeche (part of the
    Rhone-Alpes in the administrative division of Languedoc).
  * NST will form part of the Group's Education Division. PGL, the Group's
    existing education business, is already the market leader in the
    residential, outdoor education and adventure sector for UK schools, which
    organises trips for over 250,000 children each year.
  * The Group's expanded Education Division has the opportunity for further
    growth given the active promotion of the benefits of non-classroom learning
    by the UK government and the ongoing trend of schools to outsource outdoor
    learning programmes to commercial providers.
  * The acquisition is expected to be earnings enhancing for Holidaybreak
    (before any non-recurring costs and amortisation of acquired intangible
    assets) for the year ended 30 September 2008, the first year of ownership
    (see note 2 of Notes to editors, below).


Carl Michel, Holidaybreak CEO, said:
"This is another excellent acquisition for Holidaybreak and I am pleased to
welcome NST into our Group. This acquisition allows us to grow our Education
Division. NST's market leading position, cash flow and margins, are consistent
with the Group's strategy. We expect to realise significant benefits from the
combination, and we are uniquely placed to capitalise on the exciting
developments within this marketplace. Going forward, we will continue to look
for suitable acquisitions and have the capacity to consummate further deals."


Martin Davies, Managing Director of Holidaybreak's Education Division, said:
"The acquisition of NST means we can expand our offer to schools. It brings
brand leadership in the school tours market to complement PGL's market
leadership in the active learning sector. Within its first four months, our
Education Division has consolidated a strong, market leading position in the
highly attractive educational travel market."


David Craven, Chief Executive of NST, said:
"I am delighted we have this opportunity to join the Education Division of the
Holidaybreak Group. This is an exciting deal for NST, its staff and the schools
and students it serves. Together, we can build on our market leadership in these
exciting growth markets."


This summary should be read in conjunction with the background information to
the transaction, which is included below.


Holidaybreak will be hosting a conference call for analysts at 8.30 a.m. today
on [phone].



Enquiries
Holidaybreak:                                               [phone]
Carl Michel / Bob Baddeley

Brunswick                                                   [phone]
James Hogan / Craig Breheny / Ash Spiegelberg / Oliver Hughes





                   Background information to the transaction




NST
NST is the UK's leading provider of group travel to schools and colleges
throughout the UK. It has a strong brand name and reputation within the sector,
enjoys long-term relationships with schools and achieves high levels of customer
retention.

Established in 1967, NST provides and operates educational travel tours to
schools and colleges in the UK and Ireland. Tours are offered on a
subject-specific basis to complement learning activities, and developed in line
with existing curriculum needs. Products and brochures are uniquely aligned with
teachers' own priorities.

Tours are offered worldwide, but principally in the UK and Western Europe. Under
the slogan 'Bringing the Curriculum to Life', NST organises trips in the UK and
destinations around the world, including India and China. Its specialist trips
range from Media Studies tours to Los Angeles to Literature Visits to WW1
Battlefields.

In 2006, it carried 172,000 students and education staff on over 4,000 trips to
destinations in the UK, Europe and Worldwide. NST owns Le Chateau d'Ebblinghem,
a 19th century French country house 8km east of St. Omer in Flanders, which is
used as hotel accommodation. It also operates activity centres in Lancashire and
the Ardeche (part of the Rhone-Alpes in the administrative division of Languedoc).
These properties have been valued at approximately £10 million.

The acquisition of NST will allow the Group to expand its offer to schools,
colleges, teaching staff and students. It makes Holidaybreak's Education
Division the clear market leader in residential, out-of-classroom educational
tours and activities.

The Education Division possesses industry-leading safety management, product
range and product quality standards, to provide a one-stop shop for schools
across the product and age range. NST is particularly strong in the secondary
and higher education stages, whereas PGL leads at the primary school stage. PGL
expects to be able to add considerable value to NST's activity centres.
Particular benefits are also expected to accrue from a coordinated approach to
marketing and distribution.


Principal terms of the acquisition
The Group's subsidiary, Holidays Limited, has acquired the entire issued share
capital and loan stock of NST, for £27.8 million and £19.4 million respectively,
from the current owners comprising David and John Craven (sons of NST's
founder), other family members, family trusts and management.

The acquisition agreement contains warranties customary in a transaction of this
nature and size. The total consideration was paid in cash on completion. It is
expected that £3.25 million of cash will be released through a subsequent sale
and leaseback of NST's Blackpool head office, at a yield of 7.5%.


Expected financial effects
The acquisition is expected to be earnings enhancing for Holidaybreak (before
any non-recurring costs and amortisation of acquired intangible assets) for the
year ended 30 September 2008, the first year of ownership (see note 2 of notes
to editors, below).

The return on invested capital is expected to exceed Holidaybreak's weighted
average cost of capital during the year ended 30 September 2009 (see note 2 of
notes to editors, below).

Following the acquisition of NST, the Directors believe Holidaybreak's financial
position remains robust.


Other information
For the year ended 31 December 2006, NST's aggregated revenues were £45.7
million and its aggregated profit before taxation was £1.0 million, after
charging approximately £0.95 million of certain non-recurring items.

Aggregated gross assets at 31 December 2006 were £28.5 million.

NST invested significantly in its products, staffing and infrastructure during
2006 including a move to a new head office.

Average cash within NST for the twelve months prior to acquisition was
approximately £9 million and is expected to be at the same level at completion.

NST will form part of the Group's Education Division, under the leadership of
Managing Director Martin Davies. Nick Cust, Joint Managing Director of the
Group's Hotel Break's Division, will oversee the integration of NST into the
Education Division and the wider Group. NST's chief executive David Craven will,
over time, reduce his level of operational involvement in the business. Company
secretary John Craven will leave NST after a transitional period. The remainder
of NST's senior management team will remain with the Group following the
acquisition and appropriate incentivisation will be put in place in due course.




Notes to Editors

1.  Holidaybreak (HBR.L) is listed on the London Stock Exchange. The
    European specialist holiday and activity group sold 3.1m holidays in the year
    ended 30 September 2006 (2005: 3.0m). Holidaybreak has four operating divisions:
    Hotel Breaks, Adventure Travel, Camping and Education. Each is a market leader
    in its respective specialist sector of the European holiday industry, has
    multi-channel distribution and is recognised for providing high standards of
    product and service quality. For more information, please go to
    www.holidaybreak.co.uk.

2.  No statement in this announcement is intended to constitute a profit
    forecast for the financial year ending 30 September 2007 or for any other
    period. In addition, no statement in this announcement should be interpreted to
    mean that earnings per share (before any non-recurring costs and amortisation of
    acquired intangible assets) will necessarily be greater than those for the
    relevant preceding period.

3.  Certain statements in this announcement are forward looking statements.
    Such statements are based on current expectations and by their nature are
    subject to a number of risks and uncertainties that could cause actual results
    and performance to differ materially from any expected future results or
    performance expressed or implied by the forward-looking statement. The
    information does not assume any responsibility or obligation to update publicly
    or revise any of the forward-looking statements contained herein.



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