Acquisition

Northgate PLC
17 July 2002



Northgate plc

17July 2002



Northgate plc ('Northgate' or the 'Group')
Acquisition of Furgonetas de Alquiler SA ('Fualsa')


Introduction

Northgate, the UK's leading specialist in light commercial vehicle hire,
announces that it has agreed to make an initial investment by purchasing 40% of
the equity of Fualsa, one of the largest van rental companies in Spain, for a
cash consideration of €15.4 million (£9.8 million).  In addition, the Group has
options to acquire the remaining 60% by 31 May 2006.

Provided that earnings targets are met, the maximum amount payable by the Group
would be a cash consideration of €52.6 million (£33.6 million) for 100% of
Fualsa.

This represents Northgate's first acquisition in continental Europe and is
consistent with the Group's stated strategy of seeking to build a significant
rental business outside of its domestic market place.

The Group will fund the acquisition from existing resources.

Financial Effect of the Acquisition

The Directors of Northgate anticipate that the acquisition will be earnings
enhancing both pre- and post- amortisation of goodwill in the first full
financial year following the initial investment.



Information on Fualsa

Founded in 1981, Fualsa, one of the largest van rental companies in Spain, is
currently wholly owned by members of the Acebes family.   Fualsa had sales in
the twelve-month period ended 31 December 2001 of €37.9 million (£24.2 million)
and profits before tax of €4.7 million (£3.0 million).  Net assets as at 31
December 2001 were  €17.8 million (£11.4 million).

Fualsa rents light commercial vehicles and cars using 'Renting Abierto' (Open
Renting), non-contractual long-term hire arrangements similar to Northgate's '
Norflex' product, principally to customers in the construction industry.  Its
current fleet size stands at around 10,000 vehicles, of which approximately
6,200 are vans.  Fualsa operates from headquarters in Madrid and further
locations in Barcelona, Seville, Valladolid, Valencia and Zaragoza.

Reasons for the Acquisition

As mentioned in its results for the year ending 30 April 2002, the Group has
been looking to expand into continental Europe for some time.  The market for
vehicle rental in continental Europe is characterised by lower penetration rates
than in the UK and is highly fragmented.  In addition, the Spanish market is one
of the fastest growing in Europe.  The Directors of Northgate believe that the
Spanish market has many of the dynamics of the UK market some eight years ago.
During that time, Northgate has more than quadrupled its fleet and become the UK
market leader.  The acquisition will provide Northgate with an ideal entry point
into the Spanish market, providing immediate scale, local management and
potential for significant growth.

Terms of the Acquisition

Northgate will acquire Fualsa for a maximum cash consideration of €52.6 million
(£33.6 million) over a four-year period.  On completion of the acquisition,
Northgate will acquire an initial 40 percent interest in return for a cash
payment of €15.4 million (£9.8 million).  The Group then has the option to
acquire a further 40 percent interest for a maximum payment of €22.3 million
(£14.3 million) two years after completion.  In the event that the option is
exercised, the Group will then acquire the final 20 percent a further two years
later, for a maximum payment of €14.9 million (£9.5 million).  The actual amount
of the additional payments will represent the lower of the maximum payments and
a multiple of 8.5 times the average profit after tax of Fualsa in the previous
two years pro rata to the percentage of equity being acquired.

The Fualsa board will have equal representation between Northgate and the
current owners of Fualsa following completion.  Key shareholder members of the
Fualsa management team have agreed to remain with Fualsa until at least
completion of the earnout period.  In addition, senior Northgate operational and
finance staff will be permanently based in Spain.

Current trading

The Group's preliminary results for the year ended 30 April 2002 were announced
on 3 July 2002.  At that time the Group stated that it remains confident that it
will be able to continue to develop and grow its rental business in the UK
beyond 2003, through maturing its new sites and by extending both its network
and the overall rental market.  In addition, it is the Group's intention over
the next 12 months to further develop the complementary non-rental products it
offers to customers to support its continued growth.

Michael Waring, Chairman of Northgate, commented:

'As mentioned in our recent Preliminary Results statement, we are convinced that
there are excellent prospects for growth in continental Europe which will
complement the ongoing opportunities we see in the UK rental market.

'The acquisition of Fualsa marks our first significant step in our plans to
expand into Europe.  The Spanish market for light commercial vehicle hire is one
of the fastest growing in Europe today and we believe that our timing is right
to capitalise on these prospects for the benefit of Northgate shareholders in
the future.'



Enquiries:


Northgate plc                                         Tel: [phone]
Steve Smith, Chief Executive
Phil Moorhouse, Finance Director

Hogarth Partnership Limited                           Tel: [phone]
Andrew Jaques
Tom Leatherbarrow


Note: Euro conversion rate used 0.639 Euro to £1 Sterling




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