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Blueheath Holdings (BOK)

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Tuesday 01 November, 2005

Blueheath Holdings

Acquisition

Blueheath Holdings PLC
01 November 2005


FOR IMMEDIATE RELEASE                                            1 November 2005


                             Blueheath Holdings plc

                      Acquisition of AC Ward & Son Limited

Blueheath, the national delivered wholesaler using sophisticated, proprietary
technology to offer a substantial cost advantage over established players in the
£16.4bn grocery wholesale sector, is today pleased to announce the acquisition
of AC Ward & Son Limited ('ACW') for up to £3.0 million in cash (the 
'Acquisition').

ACW is a traditional delivered wholesale business to the grocery wholesale
market. It now operates from a single warehouse depot located in Thurrock in the
South East of England. For the ten months to 31 October 2005, ACW is expected to
report an annualised turnover of £55m, and net assets of £0.7m. The transaction
excludes a small cash and carry business based in Sudbury.

Of the cash consideration of up to £3.0m, a total of £1.0m is conditional on the
sales performance of the business in the period immediately following the
acquisition.

James Ward (34), formerly managing director of A C Ward & Son will be joining
the business to support the integration of the ACW business and assist with
future business development.

Rationale for and benefits of, the ACW Acquisition:

  •  Following the encouraging progress with the integration of CTM Wholesale 
     Limited, acquired by Blueheath in April this year, ACW represents a
     further opportunity to supplement the organic growth of the Company 
     through the acquisition of a traditional regional delivered wholesaler.

  •  Plans are in place for the integration of the business into the Blueheath 
     Group's current operation with the associated cost savings falling in
     the 2006/07 financial year.

  •  As with CTM, the Directors anticipate that the enlarged group will be able 
     to achieve improved operating margins through combining buying volumes, 
     the application of Blueheath's technology and business processes to the 
     ACW operation, and the integration of central overheads.

  •  ACW currently operates with stock levels of approximately 20-25 days. By
     utilising Blueheath's sophisticated proprietary technology, the Directors
     anticipate that this can be significantly reduced towards the Company's
     normal operating levels, thereby releasing significant working capital.

  •  ACW supplies delivered wholesale to around 1,000 outlets in the South
     East, providing a complementary fit with Blueheath's existing customer
     network.


Commenting on the acquisition, Douglas Gurr, Chief Executive of Blueheath said:

'We are delighted with the acquisition of ACW today. This is an important part
of our growth strategy and coupled with the encouraging progress on the
integration of CTM we are confident that Blueheath is in a good position from
which to go forward.'


Blueheath Holdings plc
Douglas Gurr, Chief Executive                    Tel: 020 7689 2455
Simon Mindham, Finance Director                  Tel: 020 7689 2464


Buchanan Communications                          Tel: 020 7466 5000
Mark Edwards / Nicola Cronk / James Strong       email: nicolac@buchanan.uk.com


Evolution Securities                             Tel: 020 7071 4300
Michael Brennan / Bobbie Hilliam


Notes to editors:
Please see today's Interim results for further information.



                      This information is provided by RNS
            The company news service from the London Stock Exchange