Inchcape Acquires Eurofleet

Inchcape PLC
11 December 2001


Inchcape plc Acquires Remaining 51% of Eurofleet
Bringing scale to Inchcape's Business Services Division

Inchcape plc, the international automotive services group, announces that it
has acquired from the management the remaining 51% stake in Eurofleet Limited.
Eurofleet is one of the leading UK providers of automotive fulfilment and
logistic services. Inchcape acquired 49% of Eurofleet in December 2000 for
£12.3m.

The addition of fulfillment and logistics to it's automobile retailing
expertise enables Inchcape to offer a totally integrated service to
manufacturers, self-drive hire and leasing companies. This encompasses fleet
management, a full logistics and refurbishment capability, as well as
remarketing expertise.

The UK market continues to offer Eurofleet considerable growth opportunities
especially in the area of fleet management and remarketing. Within Continental
Europe the market is much less developed than in the UK and the refurbishment
and remarketing of nearly new cars, especially in France and Germany, is
currently inefficient and costly. Inchcape sees significant opportunity to
develop Pan European manufacturer alliances.

The European Commission's review of the current system of Vehicle Block
Exemption is also likely to encourage new entrants into the automotive market.
Following this acquisition Inchcape will be able to provide new entrants with
a complete support service capability. Block Exemption in its current form
expires at the end of September 2002, and the results of the EC's review are
expected early next year.

Inchcape is paying £12.9m for the 51% shareholding, which in addition to the
£12.3m paid in December 2000 brings Inchcape's total investment to £25.2m. It
is estimated that Eurofleet debt will be £25m on completion. 

In addition, further consideration is payable calculated under an earn-out
formula based on EBIT growth adjusted to take account of any increase in the
capital employed in the business for the period to 2005. This EBIT growth
relates to UK activities only. If compound EBIT growth is less than c.9% p.a.
no further consideration will be payable, whilst the earn-out formula is
capped at compound EBIT growth rates of c.29% pa. The theoretical maximum
earn-out payment could amount to £27.5m, however this would require c.29%
compound annual growth in EBIT with no increase in capital employed, to 2004.
The additional consideration payable could be in the range of £14-22m, based
on challenging EBIT growth rate assumptions, making this acquisition
increasingly attractive to Inchcape.

The issue of loan notes carrying interest at market rates satisfied the
consideration, paid at closing and amounting to £12.9m. Any future entitlement
of the sellers to consideration under the earn-out will be satisfied either in
loan notes or in cash.

Eurofleet provides specialist expertise in the fields of vehicle preparation,
refurbishment and transport logistics to both vehicle manufacturers and rental
and fleet operators. It operates from centrally located facilities in
Kettering, Corby, Portbury and Scotland, and employs approximately 800 people.

For the year ended 31 December 2000 Eurofleet achieved sales of £44.1m and net
operating profit of £5.2m. Net liabilities were £9.3m including £25.2m of debt
financing. 

Peter Johnson, Group Chief Executive of Inchcape plc, said:

'This investment is a very important part of our expansion into Business
Services. The market here and in Continental Europe has considerable growth
potential. Eurofleet has an impressive track record and a highly experienced
management team, including Robert Wilkinson who shares our vision of the
strategic opportunities available in this area and who will be leading our
expansion programme. 

As we said at our Interim's, trading is positive and should at least be in
line with market expectations.'

Robert Wilkinson, Chief Executive of Eurofleet Limited said:

'The partnership with Inchcape has been a very successful one. There is no
doubt that the two organisations complement each other well and that Eurofleet
will be able to expand faster and further as a subsidiary of Inchcape.



For further information, please contact:


GROUP COMMUNICATIONS, INCHCAPE PLC 
020 7546 0022

JOHN OLSEN/TOM LEATHERBARROW, HOGARTH PARTNERSHIP LIMITED
020 7357 9477

11 December 2001