Acquisition

Babcock International Group PLC
5 June 2002


Date:                            5th June 2002

Contact:                         Gordon Campbell, Executive Chairman
                                 Bill Tame, Group Finance Director
                                 Babcock International Group PLC
                                 Telephone: [phone]
                                 Rupert Steveney
                                 Citigate Dewe Rogerson
                                 Telephone: [phone]



  BABCOCK PURCHASES FACILITY AND PROPERTY MANAGEMENT BUSINESS OF SERVICE GROUP
                               INTERNATIONAL LTD



Babcock International Group PLC (Babcock) announced today that it had agreed to
purchase the business and assets of Service Group International Ltd. (SGI) from
Hg Capital for a cash consideration of £21.3 million, debt free. The purchase
will further strengthen the position of Babcock as a leading supplier of
services to the UK Defence sector and will provide a platform to enter the civil
support services market. Subject to satisfaction of conditions precedent,
completion of the transaction is expected to take place no later than the 12th
July 2002.

SGI is a major supplier of services to MoD Estates. Defence contracts
represented 40% of SGI's turnover in year to 31 December 2001. Civil sector
clients include Ealing Council, Surrey County Council, The Crown Estates, the
Home Office and the Greater London Magistrates Court Authority. Within the
developing private sector market, SGI's clients include Shell UK and J
Sainsbury.

Net assets on completion are expected to be £2.35 million. Turnover in the year
to 31 December 2001 was £27.6 million, with an operating profit (unaudited) of
£1.6 million. Babcock expects the acquired business to be earnings enhancing,
before goodwill, in its first full year of trading within the Group.

Complementary synergies exist between Babcock's present operations and SGI,
particularly in the Defence sector where Babcock is a leading supplier of
infrastructure and equipment support services. In addition SGI have teamed up
with Bovis Lend Lease on a 50/50 basis to bid for a number of Specialist and
Regional Prime Contracts, covering maintenance and new capital works for the
MoD, delivered through a new, innovative partnering arrangement developed by the
MoD over the last two years. A further payment of up to £5.5 million, payable in
cash, is conditional upon the future success of the business in securing such
contracts.

Commenting on the transaction, Gordon Campbell, Chairman of Babcock said,

'I am delighted to complete another step in the implementation of our strategy
of becoming a dedicated supplier of support services. SGI complements our
leading position in the Defence industry, and also meets our objectives of
entering the civil sector. It has a strong management team, with whom we are
looking forward to working, to accelerate our growth in both market sectors.'

Notes for Editors:

Babcock International Group PLC

Babcock International Group PLC is a support services business primarily
supplying technical support services and facilities management to the Ministry
of Defence. Sales in the 6 months to 30th September 2001 were £227 million.

Babcock's head office is in London and the Company's shares are quoted on the
London Stock Exchange. For further information, please visit Babcock's website
at www.babcock.co.uk.

Babcock will announce its preliminary results on 18 June 2002.

Service Group International Ltd

SGI is a facility and property management business, providing management and
professional consultancy services relating to the property estates of the MoD,
Local Authorities, Central Government and the Private Sector. The activities of
SGI include:


      • Facilities management of built estates.

      • Planning, forecasting and project management of the maintenance and
        refurbishment of property estate infrastructure.

      • Multi-disciplinary project management and design services.

      • Establishment and maintenance of asset and life cycle plans.

      • Energy management and conservation.

      • Major contracts include the provision of services to the MoD in the
        South West and South East Regions.
      • Well placed for the new MoD Defence Estates Prime Contracts.





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