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Vosper Thornycroft (VSP)

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Wednesday 14 November, 2001

Vosper Thornycroft


Vosper Thornycroft Holdings PLC
14 November 2001

                                                           14th November, 2001

Embargoed until 7.00am

                    Vosper Thornycroft Holdings plc ('VT')

        Acquisition of Merlin Communications Group Limited ('Merlin')

VT announces that it has agreed to acquire Merlin for approximately £95
million. Merlin's principal business is the facilities management of
communications operations, primarily for the BBC in relation to the BBC World
Service and for the Ministry of Defence ('MoD'). It also operates a global
shortwave and mediumwave transmission network.

Merlin will complement and extend VT's existing skills and experience in the
provision of technical services and is an important step towards VT's target
to more than double turnover from its support services business over the next
3 financial years.

For the year ended 31 March 2001, Merlin reported operating profit, excluding
a business to be discontinued, of £7.2 million on turnover of £74.6 million.
Merlin is being acquired with sufficient cash balances to fund the expected
closure or disposal costs of the business to be discontinued. Including the
results of this business, Merlin reported a loss before tax of £0.5m on
turnover of £75.8 million. Net assets of Merlin as at 31 March 2001 were £11.8

Merlin has recently signed a number of significant new contracts including the
£280m Submarine Fleet Communications Service PFI and the £34m contract to
replace the BBC World Service transmitter relay station in Oman.

The consideration of approximately £95 million is being satisfied by a
combination of cash, loan notes and the issue of up to 1.38 million new
ordinary shares in VT. It is expected that the acquisition will be completed
on 30 November 2001 and will be earnings enhancing before the amortisation of
goodwill in the first full year following acquisition.

Application will be made to the UK Listing Authority for up to 1.38 million
new ordinary shares in VT to be admitted to the Official list and application
will be made to the London Stock Exchange for said shares to be admitted to
trading on the London Stock Exchange. It is expected that dealings in the new
ordinary shares on the London Stock Exchange will commence on 30 November

The management team of Merlin will remain with the business and Merlin will be
incorporated into VT's Civil Support Services Division.

This latest acquisition follows the recent acquisition by VT of a leading US
facilities management company, Griffin Services Inc, and brings to five the
number of acquisitions VT has made since March.

Commenting on the acquisition of Merlin, VT Chief Executive Martin Jay said:
'The acquisition of Merlin continues our strategy of developing our Support
Services businesses. It marks the commencement of an important new
relationship with the BBC and deepens our relationship with the MoD. Merlin
broadens VT's technical support offering and opens up new opportunities both
in the UK and overseas.'


Vosper Thornycroft Holdings plc               Tel:     02380 426000

Martin Jay, Chief Executive

Chris Cundy, Finance Director

Dresdner Kleinwort Wasserstein               Tel:     020 7623 8000

David Barclay

Nicholas Lee

Dresdner Kleinwort Wasserstein Limited ('Dresdner Kleinwort Wasserstein'),
which is regulated by The Securities and Futures Authority Limited in the
United Kingdom, is acting for Vosper Thornycroft in relation to the
transaction and no one else and will not regard any other person as its
customer nor be responsible to anyone other than Vosper Thornycroft for
providing the protections afforded to customers of Dresdner Kleinwort
Wasserstein nor for providing advice in relation to the contents of this
announcement or any matter referred to herein.

* This statement regarding earnings enhancement does not constitute a profit
forecast nor should it be interpreted to mean that earnings per share of VT
for the current or future years will necessarily match or exceed the
historical published earnings per share of VT.

Notes to Editors:

  * VT is a leading civil and defence contractor focusing on technical and
    other related support services, shipbuilding and marine products.
    Together, these activities employ 7,500 people in a global network
    covering the UK, Europe, United States and the Middle East. Turnover is in
    the region of £400 million per year.

  * VT Support Services encompasses both civil and military activities.
    Civil support focuses on specialist engineering services, training and
    education and careers guidance, while military support is tri-service and
    includes training, platform and equipment maintenance and facilities

  * VT is one of the world's leading designers and builders of naval ships,
    both for the defence and commercial market. Building is in steel,
    aluminium or fibre reinforced plastic.

VT Marine Products is an electronic/electrical systems business concentrated
on the marine, offshore and power industries.