Share price: 104.00p

SMT ACQUISITION

26th September 2006

Cello acquires strategy & research consultancy SMT

 

Cello Group plc (‘Cello’, AIM: CLL), the research and data led marketing

services group, has acquired SMT Consulting Limited (‘SMT’), a leading strategy and research consultancy specialising in the fast growing market of business and competitive intelligence. Initial consideration consists of up to £6.2 million with further performance related consideration of up to £8.8 million.

SMT’s client base includes around 20% of the FTSE 100 companies and a number of Fortune 500 corporations in the areas of financial services, nuclear & utilities, telecoms and FMCG. It is based in Oxford, employs approximately 35 people and also has an office in Shenzhen, China.

The initial consideration consists of up to £6.2 million of which £4.2 million is payable in cash and the balance satisfied by the issue of 1,542,480 new ordinary shares. In addition, there are further performance related payments over the period to 31 December 2010. These payments are in a mixture of loan notes and new ordinary shares at Cello’s discretion, with a maximum share element of 75%.

In order to finance the cash element of the acquisition, Cello has entered into a new £12 million committed three year banking facility. Following the transaction, Cello has net debt of approximately £2 million.

For the year to 30 April 2006, SMT had a turnover of £3.4 million and normalised profits before tax of £0.8 million. Net assets at 30 April 2006 were £0.7 million including cash of £0.5 million.

Application has been 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 29 September 2006.

Kevin Steeds, Cello Group’s Chairman, said: “SMT is an exciting addition to the Cello Group, further strengthening our

upstream research and consulting offer. With its impressive client franchise in the UK and Asia, SMT also helps accelerate the development of our international offering.”

 

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Dianna Hillier

Dianna.Hillier@cellohealth.com

Phone 020 7812 8468

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