Acquisition

Radstone Technology PLC
08 July 2004

FOR IMMEDIATE RELEASE                                       8 JULY 2004



                       RADSTONE TECHNOLOGY PLC ("Radstone")

Radstone Technology PLC announces the £14.2 million acquisition of Octec Limited
("Octec") and the associated vendor placing to raise £6.2 million (the "Vendor
Placing")

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, OR INTO, THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND AND THE REPUBLIC OF SOUTH
AFRICA AND THEIR RESPECTIVE TERRITORIES AND POSSESSIONS

Members of the public are not eligible to take part in the Vendor Placing
described below. Invitations to participate in the Vendor Placing will be
limited to investment professionals within the meaning of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2001 (as amended).

Your attention is drawn to the section marked "GENERAL" at the end of this
announcement. The full terms and conditions of the Vendor Placing are appended
to this announcement.

This announcement is solely the responsibility of the Company and its directors.
Neither Cazenove & Co. Ltd nor any of its subsidiaries nor any of their
respective directors, employees and agents accept any liability whatsoever for
the accuracy of any information or opinions contained in this document or for
the omission of any material information, for which they are not responsible.

Introduction

Radstone Technology PLC (the "Company" or "Radstone" and together with its
subsidiary undertakings the "Group"), a supplier of high-performance, embedded
computer products for defence and aerospace applications, today announces the
acquisition of Octec Limited (the "Acquisition"), a privately owned company
specialising in image processors and video trackers for the embedded computing
market, which is based in Bracknell, Berkshire.

Consideration

-          The initial consideration payable for the Acquisition is £10.7
million, subject to a reduction dependent on Octec's working capital position,
plus an additional payment of an amount equal to the net cash balances of Octec
at completion, which are expected to be approximately £2.0 million.

-          Additional cash consideration of up to £3.5 million is payable,
contingent on Octec achieving certain operating profit targets for the year to
31 January 2005.

-          Approximately £468,000 of the initial consideration is payable in
ordinary shares to two of the Octec vendors who are remaining with Radstone as
Directors of the subsidiary.

-          The cash element of the initial consideration for the Acquisition
will be satisfied by £6.2 million from the Vendor Placing and the balance from
existing cash resources.

Expected benefits of the Acquisition:

-          it represents a significant step in Radstone's strategy of supplying
a wider range of system solutions to its customers;

-          Octec's core competency in image processing and video tracking
software and algorithms is highly complementary to Radstone's computer subsystem
expertise;

-          it will bring Radstone incremental high margin revenue and cashflow
and is expected to be earnings per share enhancing in the current financial year
*; and

-          image processing and video tracking represent a new application area
for Radstone.

*: Calculated on a pre-goodwill and pre-exceptional basis

Commenting on the acquisition, Jeff Perrin, Chief Executive said,

"We are very pleased to announce this significant step in Radstone's strategy.
Octec Limited is a leader in image processors and video trackers in the embedded
computing market and will fit extremely well with Radstone's existing expertise.
Ultimately this will enable us to expand our offering to our customers by
supplying a range of higher level system solutions."

Information on Octec

Founded in 1989, Octec is an independent supplier of commercial-off-the-shelf ("
COTS") video tracking and image processing systems to the aerospace market world
wide.  Octec employs approximately 50 people, the majority of whom are based in
its headquarters in Bracknell, Berkshire.

Octec supplies the hardware and software design for video trackers and image
processing equipment and a wide range of complementary technologies. These
include system management processing, digital and analogue interfacing and
signal distribution and electro optical sensor specification together with
overall systems integration for applications in the airborne, land and marine
environments.

For the financial year ended 31 January 2004 Octec's audited turnover and profit
before tax were £6.3 million and £1.1 million respectively, on net assets of
£2.9 million.

Details of the Vendor Placing

Radstone proposes to raise £6.2 million, after expenses, by way of the Vendor
Placing, being the placing with institutional investors of 2,100,000 new
ordinary shares in the capital of the Company ("Placing Shares") priced at 293
pence per share (the "Placing Price"). The Placing Shares will rank pari passu
in all respects with the Company's existing issued ordinary shares.  The Placing
Shares are equivalent to 7.5 per cent. of the Company's existing issued share
capital and will, when issued, represent approximately 6.9 per cent. of the
Company's enlarged issued share capital.

Application has been made to the UK Listing Authority and to London Stock
Exchange PLC for all the Placing Shares to be admitted to the Official List and
to trading on London Stock Exchange PLC's market for listed securities
respectively ("Admission"). It is expected that Admission will become effective
from 8.00am on 13 July 2004 and dealings in the Placing Shares will commence at
that time.

The Vendor Placing is fully underwritten by Cazenove under an agreement with the
Company entered into today (the "Placing Agreement").  The Vendor Placing is
conditional, inter alia, on (i) the Placing Agreement having become
unconditional in all respects and not having been terminated in accordance with
its terms and (ii) Admission becoming effective by not later than 13 July 2004
or such later date as the Company and Cazenove shall agree, being not later than
31 July 2004.

The Placing Shares are to be placed with institutional investors only; members
of the public are not eligible to participate in the Vendor Placing. The Placing
Shares will be acquired by placees on the basis that they have not relied on any
information, representation, and/or warranty from Cazenove or the Company, save
for the information contained in this announcement and the terms and conditions
appended hereto.

Radstone Technology plc was advised by Cazenove & Co. Ltd in connection with the
Vendor Placing.

For further information:

Radstone Technology PLC                          [phone]
Jeff Perrin, Chief Executive                     Web: http://www.radstone.co.uk
Kevin Boyd, Group Finance Director

Cazenove & Co. Ltd                               [phone]
Charles Harman
David Harvey-Evers

Close Brothers Corporate Finance Limited         [phone]
Andrew Cunningham
Shane Lawlor

Buchanan Communications                          020 7466 5000
Tim Thompson / Nicola Cronk                      Email : [e-mail]

GENERAL

Cazenove, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Radstone as Sponsor and
underwriter and no one else in relation to the Vendor Placing and will not be
responsible to any other person (whether or not such person is in receipt of
this announcement) for providing the protections afforded to its customers or
for advising any other person in relation to the Vendor Placing.

Certain statements made in this announcement are forward looking statements.
Such statements are based on current expectations and 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, express or
implied, by the forward looking statements. Factors that might cause forward
looking statements to differ materially from actual results include, among other
things, political, regulatory and economic factors. Radstone assumes no
responsibility to update any of the forward looking statements contained in this
announcement. Further, any indication in this announcement of the price at which
ordinary shares of Radstone have been bought or sold in the past cannot be
relied upon as a guide to future performance.

This announcement and the information contained herein is not for publication or
distribution to persons in the United States, Australia, Canada, Japan, the
Republic of Ireland, the Republic of South Africa or in any jurisdiction in
which such publication or distribution is unlawful.

Members of the general public are not eligible to take part in the Vendor
Placing. This announcement, in so far as it constitutes an invitation or
inducement to participate in the Vendor Placing, is directed only at persons who
have professional experience in matters relating to investments who are
investment professionals within the meaning of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2001 (as amended) ( "Relevant
Persons"). This announcement, in so far as it constitutes an invitation or
inducement to participate in the Vendor Placing, must not be acted on or relied
on by persons who are not Relevant Persons. Any investment or investment
activity in so far as relating to participation in the Vendor Placing is
available only to Relevant Persons and will be engaged in only with Relevant
Persons.

The making of an offer in certain jurisdictions or to residents who are citizens
of certain jurisdictions ("Foreign Persons"), may be restricted by laws or
regulations of the relevant jurisdictions. Foreign Persons should inform
themselves about and observe any such applicable legal requirements in their
respective jurisdiction.

This announcement does not constitute an offer to sell or issue, or constitute
the solicitation of an offer to acquire or buy, any Placing Shares to any person
in any jurisdiction.

The Placing Shares have not been, and will not be, registered under the US
Securities Act 1933, as amended (the Securities Act) or with any securities
regulatory authority of any State or other jurisdiction of the United States,
and accordingly may not be offered or sold in the United States unless
registered under the Securities Act or pursuant to an exemption from such
registration. No regulatory authority has passed upon or endorsed the merits of
the offering of the Placing Shares or the accuracy or adequacy of this document.
Any representation to the contrary is a criminal offence in the United States.

TERMS AND CONDITIONS OF THE VENDOR PLACING

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE VENDOR PLACING. THE
TERMS AND CONDITIONS SET OUT HEREIN ARE DIRECTED ONLY AT PERSONS SELECTED BY
CAZENOVE WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND
ARE "INVESTMENT PROFESSIONALS" WITHIN THE MEANING OF ARTICLE 19(5) OF THE
FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTIONS) ORDER 2001 (AS
AMENDED) ("RELEVANT PERSONS"). THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT
BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT
ACTIVITY TO WHICH THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE
ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

These terms and conditions and the information contained herein are not for
publication or distribution, directly or indirectly, to persons in the United
States, Canada, Australia, Japan, the Republic of South Africa, the Republic of
Ireland or in any jurisdiction in which such publication or distribution is
unlawful.

1.       INTRODUCTION

These terms and conditions apply to Relevant Persons making an offer to
subscribe Placing Shares under the Vendor Placing.

Each Relevant Person to whom these conditions apply, as described above, who
confirms his agreement to Cazenove and the Company to subscribe Placing Shares
(which may include Cazenove or their nominee(s)) (an "Investor") hereby agrees
with each of Cazenove and the Company to be bound by these terms and conditions
as being the terms and conditions upon which Placing Shares will be issued under
the Vendor Placing and to be providing the representations, warranties,
acknowledgements and undertakings set out herein. An Investor shall, without
limitation, become so bound if Cazenove confirms to the Investor (i) the Placing
Price and (ii) its allocation.

The Placing Shares have not been and will not be registered under the US
Securities Act 1933 and may not be offered or sold within the United States
absent registration or an exemption from registration under such act.

The Placing Shares have not been recommended, approved or disapproved by any
United States federal or state securities commission or regulatory authority.
Furthermore, the foregoing authorities have not confirmed the accuracy or
determined the adequacy of this document. Any representation to the contrary is
a criminal offence in the United States.

These terms and conditions do not constitute an offer to sell or issue or
solicitation of an offer to buy or subscribe the Placing Shares in any
jurisdiction, including, without limitation, the United States, Canada,
Australia, the Republic of South Africa, the Republic of Ireland or Japan. The
distribution of these terms and conditions and the press announcement to which
these terms and conditions are appended (the "Press Announcement") and sale of
or subscription for the Placing Shares in certain jurisdictions may be
restricted by law. Relevant Persons to whose attention these terms and
conditions have been drawn are required by the Company and Cazenove to inform
themselves about and to observe any such restrictions.

2.       AGREEMENT TO ACQUIRE PLACING SHARES

Conditional on (i) Admission occurring on or prior to 8 a.m. on 13 July 2004 (or
such later date as Cazenove and the Company may agree (not being later than 31
July 2004)) and (ii) the confirmation mentioned under paragraph 1 above, an
Investor agrees to subscribe, at the Placing Price, the number of Placing Shares
allocated to such Investor under the Vendor Placing in accordance with the
arrangements described in the press release to which these terms and conditions
are appended. To the fullest extent permitted by law, each Investor acknowledges
and agrees that it will not be entitled to exercise any remedy of rescission at
any time. This does not affect any other rights such Investor may have.

3.       PRINCIPAL TERMS OF THE VENDOR PLACING

This section gives details of the terms and conditions of, and the mechanics of
participation in, the Vendor Placing.

3.1           Cazenove is arranging the Vendor Placing as an agent for and on
behalf of the Company. Participation will only be available to persons invited
to participate by Cazenove.

3.2           The Placing Price shall be advised to potential Investors prior to
them confirming their participation in the Vendor Placing.

3.3           An Investor's irrevocable commitment to acquire a fixed number of
Placing Shares at the Placing Price will be agreed with and confirmed by it
orally and a written confirmation in the form of a contract note (in either
electronic or paper form) will be dispatched as soon as possible thereafter. The
Investor's oral confirmation to Cazenove constitutes an irrevocable, legally
binding contractual commitment to Cazenove, as agent for the Company, from the
Investor to subscribe a fixed number of Placing Shares on the terms and
conditions set out in this section.

3.4           There will be no commission payable in relation to the Placing
Shares.

3.5           Save in respect of depositary receipt arrangements or clearance
services (as to which see warranty 5.6 below), no United Kingdom stamp duty or
stamp duty reserve tax will be payable on the issue of the Placing Shares.

3.6           By participating in the Vendor Placing, each Investor agrees with
Cazenove that the exercise by Cazenove of any right of termination or other
discretion under the Placing Agreement shall be within the absolute discretion
of Cazenove and that Cazenove need not make any reference to the Investor and
that neither Cazenove nor the Company shall have any liability whatsoever to the
Investor in connection with any such exercise.

3.7           Investors will participate in the Vendor Placing on the basis of
these terms and conditions and the Press Announcement.

4.       PAYMENT, REGISTRATION AND SETTLEMENT

Each Investor undertakes to pay the Placing Price for the Placing Shares issued
to such Investor in such manner as shall be directed by Cazenove.

Settlement of transactions in the Placing Shares will take place within the
CREST system, subject to certain exceptions. Cazenove reserves the right to
require settlement for and delivery of the Placing Shares to the Investors in
such other means that it deems necessary if delivery or settlement is not
possible within the CREST system within the timetable set out herein or would
not be consistent with the regulatory requirements in the jurisdictions of such
Investors.

It is expected that settlement will take place on 13 July 2004.

In the event of any failure by any Investor to pay as so directed by Cazenove,
the relevant Investor shall be deemed hereby to have appointed Cazenove or any
nominee of Cazenove to sell (in one or more transactions) any or all of the
Placing Shares in respect of which payment shall not have been made as directed
by Cazenove and to indemnify on demand Cazenove in respect of any liability for
stamp duty and/or stamp duty reserve tax arising in respect of any such sale or
sales (together with any interest or penalties thereon).

If Placing Shares are to be delivered to a custodian or settlement agent of an
Investor, the relevant Investor should ensure that the written confirmation
referred to above is copied and delivered immediately to the relevant person
within that organisation.

5.       REPRESENTATIONS AND WARRANTIES

By receiving these terms and conditions, each Investor and any person acting on
his/its behalf is deemed to represent and warrant to Cazenove and the Company
that:

5.1           it has read and understood these terms and conditions and the
Press Announcement in their entirety;

5.2           if the Investor is a natural person, such Investor is not under
the age of majority (18 years of age in the United Kingdom ("UK")) on the date
of such Investor's agreement to subscribe Placing Shares under the Vendor
Placing;

5.3           in agreeing to subscribe Placing Shares under the Vendor Placing,
the Investor is relying on these terms and conditions and the Press Announcement
and not on any other information or representation concerning the Group or the
Vendor Placing. Such Investor agrees that none of the Company, Cazenove nor any
of their respective officers, partners, directors or employees will have any
liability for any such other information or representation and, to the extent
that any such person may be found to have any such liability, the Investor
hereby waives any right that he/it may have to make any claim in relation
thereto;

5.4           if the laws of any place outside the UK are applicable to the
Investor's agreement to subscribe Placing Shares and/or acceptance thereof, such
Investor has complied with all such laws and none of the parties mentioned under
paragraph 1 above will infringe any laws outside the UK as a result of such
Investor's agreement to subscribe Placing Shares and/or acceptance thereof or
any actions arising from such Investor's rights and obligations under the
Investor's agreement to subscribe Placing Shares and/or acceptance thereof or
under the articles of association of the Company (the "Articles");

5.5           in the case of a person who confirms to Cazenove on behalf of an
Investor an agreement to subscribe Placing Shares, that person represents and
warrants that he has authority to do so on behalf of the Investor;

5.6           the Investor is not, and is not applying as nominee or agent for,
a person who is, or may be, mentioned in any of sections 67, 70, 93 or 96 of the
Finance Act 1986 (depository receipts and clearance services);

5.7           the Investor is a person who falls within paragraph (5) of Article
19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order
2001;

5.8           the Investor has complied with its obligations in connection with
the prevention of money laundering under the Proceeds of Crime Act 2002 and the
Money Laundering Regulations 2003 (the "Regulations") and, if it is making
payment on behalf of a third party, that satisfactory evidence has been obtained
and recorded by it to verify the identity of the third party as required by the
Regulations;

5.9           the Investor has complied and will comply with all applicable
provisions of the Financial Services and Markets Act 2000 (the "FSMA") with
respect to anything done by it in relation to the Placing Shares in, or
otherwise involving, the UK; and

5.10        the Investor has all necessary capacity and has obtained all
necessary consents and authorities to enable it to commit to participate in the
Vendor Placing and to perform its obligations in relation thereto (including,
without limitation, in the case of any person on whose behalf it is acting, all
necessary consents and authorities to agree to the terms set out or referred to
in these terms and conditions).

6.       ACKNOWLEDGEMENTS AND UNDERTAKINGS

By participating in the Vendor Placing, each Investor (and any person acting on
his behalf):-

6.1           acknowledges that participation in the Vendor Placing is on the
basis that it is not and will not be a client or customer of Cazenove and that
Cazenove shall not have any duties or responsibilities to it for providing the
protections afforded to their respective clients or customers or for providing
advice in relation to the Vendor Placing or in respect of any representations,
warranties, undertakings or indemnities contained in the Placing Agreement nor
for the exercise or performance of any of Cazenove's rights and obligations
thereunder, including any right to waive or vary conditions or exercise any
termination right;

6.2           undertakes and agrees that:

(i) the person whom it specifies for registration as holder of the Placing
Shares will be (a) the Investor or (b) the Investor's nominee, as the case may
be;

(ii) neither Cazenove nor the Company will be responsible for any liability to
stamp duty or stamp duty reserve tax resulting from failure to observe this
requirement; and

(iii) the Investor and any person acting on its behalf agrees to subscribe on
the basis that the Placing Shares will be transferred to the CREST stock account
of Cazenove who will hold them as nominee on its behalf until settlement in
accordance with its standing settlement instructions;

6.3           acknowledges that the content of these terms and conditions and
the Press Announcement is exclusively the responsibility of the Company and that
neither Cazenove nor any person acting on its behalf is responsible for or shall
have any liability for any information, representation or statement relating to
the Company contained in these terms and conditions or the Press Announcement or
any information previously published by or on behalf of the Company and will not
be liable for any Investor's decision to participate in the Vendor Placing based
on any information, representation or statement contained in these terms and
conditions or the Press Announcement or otherwise;

6.4           acknowledges and understands that the Company and Cazenove will
rely upon the truth and accuracy of the representations, warranties and
acknowledgements in paragraphs 5 and 6 of these terms and conditions which shall
be given to each of Cazenove and the Company and shall be irrevocable;

6.5           acknowledges that the Placing Shares have not been and will not be
registered under the US Securities Act or the securities legislation of any
State of the United States, Australia, Canada, Japan, the Republic of South
Africa or the Republic of Ireland and, subject to certain exceptions, may not be
offered, sold, delivered or transferred, directly or indirectly, within those
jurisdictions;

6.6           undertakes and agrees that it will not offer or sell any Placing
Shares within the United States except in accordance with Rule 903 of Regulation
S of the US Securities Act or to QIBs pursuant to the exemption from the
registration requirements of the US Securities Act provided by Rule 144A; and

6.7           undertakes and agrees that neither it nor its affiliates nor any
person acting on its or their behalf have engaged in or will engage in any "
general solicitation or general advertising" (within the meaning of Regulation D
under the US Securities Act) or "directed selling efforts" (as defined in
Regulation S under the US Securities Act) in connection with any offer or sale
of the Placing Shares.

7.       SUPPLY AND DISCLOSURE OF INFORMATION

If the Company, Cazenove or any of their agents request any information about an
Investor's agreement to subscribe Placing Shares, such Investor must promptly
disclose it to them.

8.       MISCELLANEOUS

The rights and remedies of Cazenove and the Company under these terms and
conditions are in addition to any rights and remedies which would otherwise be
available to each of them and the exercise or partial exercise of one will not
prevent the exercise of others.

On application, each Investor may be asked to disclose, in writing or orally, to
Cazenove:

(i)                  if he is an individual, his nationality; or

(ii)                if he is a discretionary fund manager, the jurisdiction in
which the funds are managed or owned.

All documents will be sent at the Investor's risk. They may be sent by post to
such Investor at an address notified to Cazenove.

Each Investor agrees to be bound by the Articles (as amended from time to time)
once the Placing Shares which such Investor has agreed to subscribe have been
issued to such Investor.

The contract to subscribe Placing Shares and the appointments and authorities
mentioned herein will be governed by, and construed in accordance with, the laws
of England. For the exclusive benefit of the parties mentioned under paragraph 1
above, each Investor irrevocably submits to the exclusive jurisdiction of the
English courts in respect of these matters. This does not prevent an action
being taken against an Investor in any other jurisdiction.

In the case of a joint agreement to subscribe Placing Shares, references to an
Investor in these terms and conditions are to each such Investor and such
Investors' liability is joint and several.

The Company and Cazenove expressly reserve the right to modify the Vendor
Placing (including, without limitation, its timetable and settlement) at any
time before the Placing Price and allocations are determined.

9.       SELLING RESTRICTIONS

Before Admission becomes effective, Investors may only offer or sell Placing
Shares in the United Kingdom:

9.1           to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their business; or

9.2           otherwise in circumstances which will not result in an offer to
the public in the United Kingdom within the meaning of the FSMA.


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