Acquisition

Tanfield Group PLC 04 October 2004 Tanfield Group Plc Acquisition of SEV Group Limited ('SEV') The Board is pleased to announce the acquisition of SEV. SEV is a long established, profitable, business. It has a strong international reputation for design and manufacture of electric vehicles and aerial access equipment for industrial and closed urban use, as well as providing a national service and maintenance capability to its customers. The directors believe that zero and low emission delivery vehicles, access platforms and people carriers have significant growth potential given their cost and environmental benefits. Tanfield has been a major supplier to SEV for a number of years and the directors of the Company identified SEV as an acquisition on the basis that the synergies between the businesses offered a number of growth opportunities. The Directors believe that the acquisition is consistent with the Company's strategy of moving up the value chain in order to enhance its margins. In its last accounting period, to 31 December 2003, the profits after tax and after directors' drawings of SEV were £131,000 and the net assets of the business at the end of the period were £1,343,000. The price being paid for the acquisition is £2.2 million in cash and 1,000,000 new ordinary shares. The acquisition will be completed in two stages so that investors can benefit from the Enterprise Investment Scheme. The first stage is the acquisition of SEV's hire business for £540,000 by the Company's wholly owned subsidiary Express 2 Automotive Limited and the second stage is the acquisition of the issued share capital of SEV's non trading parent company, Motionobject Limited by the Company's wholly owned subsidiary 3D Image Box Limited for £1.66 million and the issue of 1,000,000 new ordinary shares. Completion of the two stages will occur on consecutive days and is conditional on admission to AIM of the company's new ordinary shares placed by Daniel Stewart as described below. In order to help fund this acquisition and provide further working capital for the Company, as previously announced, the Company placed through Daniel Stewart 40,050,000 new ordinary shares at 10p each. 23,550,000 of these shares will be admitted to trading on AIM on Friday 8 October 2004 and the remaining 16,600,000, which have been placed with investors under the Enterprise Investment Scheme will be admitted to trading on Monday 11 October 2004. In addition, the 1,000,000 new ordinary shares issued to a shareholder in Motionobject Limited as part of the acquisition will be admitted to trading on Tuesday 12 October 2004. For further information call: Tanfield Group Plc Roy Stanley - Chief Executive - 01207 521111 Daniel Stewart & Co Ruari McGirr - 020 7374 6742 This information is provided by RNS The company news service from the London Stock Exchange
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