Share price: 104.00p

ACQUISITION

18th July 2005

Cello acquires The Value Engineers

Cello Group plc (‘Cello’), the marketing services group which listed on AIM in November 2004, has acquired The Value Engineers Limited (‘The Value Engineers’), a leading brand and marketing consultancy, for a total maximum consideration of up to £7.15 million in cash, loan notes and new ordinary shares.

The Value Engineers, formed in 1986 by Paul Walton & Graham Harding, will join Cello’s brand development platform. It works with a range of leading brands including Unilever, Carlsberg, Diageo, Sony Ericsson, ICI, Visa, T-Mobile, BP and Britvic.

The initial consideration consists of £4.48 million, of which £2.24 million is in cash and loan notes and the balance satisfied by the issue of 1,877,619 new ordinary shares at completion. In addition, there is a maximum deferred consideration of up to £2.67 million dependent on the financial performance of the business for the period to 31 December 2008. The deferred consideration is payable in a mixture of loan notes and new ordinary shares at Cello’s discretion. The maximum share element will be 75% of the deferred consideration.

For the year to 31 December 2004, The Value Engineers had a turnover of £3.7 million, gross profit of £2.9 million and profit before tax of £0.64 million and will deliver net assets of approximately £0.65 million at completion.

Application will be made to the London Stock Exchange for the new shares to be admitted to AIM and it is expected that admission will take place by 22 July 2005.

Kevin Steeds, Cello Chairman, said:

‘The Value Engineers is a business we have known and respected for a long time. It adds significant depth to our brand and marketing consultancy offer, with an excellent, committed management team and client franchise. This further reinforces Cello’s positioning at the high value added end of the marketing services spectrum.’

 

Contact Us

Dianna Hillier

Dianna.Hillier@cellohealth.com

Phone 020 7812 8468

Address

Cello Health plc

Queens House

8-9 Queen Street

London

EC4N 1SP

Registered Office

Queens House

8-9 Queen Street

London

EC4N 1SP

Company Registered

in England no.05120150