Acquisition

Quarto Group Inc
28 August 2007


Tuesday 28 August 2007

                                QUARTO GROUP PLC

            Quarto in $12.5 million Acquisition of US Book Publisher

Quarto, the London-based and listed international book publisher, announces the
acquisition of MBI Publishing Company LLC ('MBI'), a publisher and distributor
of special interest titles, based in Minneapolis, USA, from MBI Publishing
Holdings LLC, a private equity vendor.

Laurence F Orbach, Quarto's Chairman and Chief Executive Officer, said: 'MBI is
a significant acquisition, in line with our strategy of building strength in
publishing books for audiences of enthusiasts and professionals, and leveraging
our back office infrastructure to achieve improvements in overall financial
performance. It fits excellently with our various Quayside imprints and we look
forward to building upon the strength of the enlarged group. We expect to move
rapidly to integrate MBI's back office activities with Quayside, a core
component of Quarto's publishing segment, which is located in Minneapolis.'

'MBI is the leading US publisher of books for transport enthusiasts
(automobiles, motorcycles, trucks, tractors, aviation, etc), and the major US
distributor for a number of overseas, predominantly UK-based, publishers of
specialist transport titles; it also publishes a respected range of military
history and militaria titles, under the Zenith imprint, and a more general list
of regional, outdoor activity, sport, and special interest titles under the
Voyageur Press imprint.'

'Today's purchase is an excellent way to further the growth of Quarto's Quayside
Publishing Group, which is on track to be the publisher and distributor of
choice for books for enthusiasts across a wide range of subject categories.'

MBI will become part of the Quayside Group, and be managed by its CEO, Ken Fund.
'Motorbooks has an extremely well respected name in the transportation category,
and is one of the best-defined brands in publishing,' says Ken Fund. 'I am
thrilled with the acquisition, and the opportunity to lead a company with such
an established reputation and deliberate publishing strategy. In addition to its
success in the traditional book trade, MBI has generated significant revenues
from the highly important automotive, farm, and hobby channels, as Quayside has
done within the home improvement, outdoor, and craft channels. Both companies
have long set the standard satisfying enthusiasts' thirst for detail.'

MBI and its three imprints will be integrated into the Quayside Publishing
Group. MBI ranks as one of the 20 largest independent consumer publishers and is
the largest with a pure play focus on the enthusiast. In 2005, MBI celebrated
its 40th anniversary, and today they offer more than 8,000 book and calendar
titles across a wide range of subjects including cars, motorsports, motorcycles,
tractors, railroads, racing, travel, nature, military history, aviation, country
living, Americana and calendars. MBI publishes more than 200 books per year
under three core imprints: Motor Books, Voyageur Press and Zenith Press. Recent
bestsellers include Muscle: America's Legendary Performance Cars, How to Repair
Your Car, Ultimate Horse Barns, and Iwo Jima: Portrait of a Battle.

Distribution services are an important component of MBI's business (MBI
Distribution Services). In addition to the distribution of their own titles MBI
distributes for more than two dozen specialist publishers. On average
Distribution's client publishers have been distributed by the company for more
than a decade. In addition to its exclusive distribution relationships, MBI
takes advantage of its market position to wholesale books of other publishers
into specialty channels, and particularly into Tractor Supply Co. (TSC), for
which MBI serves as the category manager. 'We look forward to building on the
relationship MBI has forged with TSC and being their partner for a long time to
come,' says Ken Fund. Tractor Supply Co. is the company's primary wholesale
account.

Quayside Publishing Group (formed in 2004 upon Rockport Publishers' acquisition
of Creative Publishing international, which is based in Minneapolis) encompasses
five imprints: Creative Publishing international, Fair Winds Press, Quarry
Books, Quiver, and Rockport Publishers. Quayside currently publishes over 250
books a year in the graphic design, enthusiast and lifestyle categories. Recent
bestsellers include The 150 Healthiest Foods on Earth, Black & Decker(R) The
Complete Photo Guide to Home Repair, Universal Principles of Design, Singer
Simple Sewing Guide and The Art of Fly Tying.

MBI's warehouse operation will continue to be located in Osceola, WI. MBI's CEO,
Randy Roland, will leave the company to pursue new interests.

The consideration for the purchase of MBI is $12.5 million, payable in cash. As
of December 31, 2006, the value of the gross assets being acquired was $41.8m.
For the year ended December 31, 2006, the business reported net revenues of
$35.2m and an operating profit of $1.9 million, before amortization of
intangibles of $1.3m, and interest costs of $2.7m. The acquisition is being
financed using Quarto's existing committed facilities, which total $165 million,
and includes the assumption of approximately $22.2 million of debt.

'We expect the operating profit contribution from MBI to be in excess of our
publishing division target of 10% of sales, and to enhance earnings on a full
year basis. The acquisition is a further step in achieving Quarto's objective to
become the publisher and distributor of choice in the area of lifestyle
publishing. We continue to investigate further acquisition opportunities'
commented Michael Mousley, Quarto's Chief Financial Officer.

Enquiries:

The Quarto Group, Inc.
Laurence Orbach (Chairman & CEO)                                 020-7700 9003
Mick Mousley (Finance Director)                                  020-7700 9004

Bankside Consultants Limited
Charles Ponsonby                                                 020-7367 8851


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