Acquisition

Stanelco PLC
06 May 2004


                                  Acquisition
                Stanelco plc signs Heads of Agreement to acquire
                            Aquasol for £3.1 million

Stanelco plc, the RF (radio frequency) applications group, is pleased to
announce that it has signed binding heads of agreement to acquire 100% of the
issued share capital of Aquasol Limited for a maximum consideration of £3.1
million, subject to achievement of certain performance criteria.

An initial payment of £0.5 million in new Ordinary 0.1p shares is payable, 50%
(5,000,000 Ordinary 0.1p shares) upon signing of the heads of agreement and the
remainder (5,000,000 Ordinary 0.1p shares) upon completion. The remaining sum of
up to £2.6 million will be payable over 2-3 years in new issued shares or in
cash at Stanelco's option.

The transaction is subject to finalisation of a sale and purchase agreement with
the shareholders of Aquasol and remaining due diligence. Clarification as to
whether the transaction requires shareholder approval is currently being sought.

Aquasol is the world leader in water-soluble packaging innovation, products and
processes. The intellectual property based company has over 18 years experience
in water-soluble packaging technology and its team has been named inventors in
44 international patent applications. They are the creators of Unilever's Persil
capsule, Reckitt Benckiser's gelcaps including Electrasol, Woolite and Calgon
brands, Schering-Plough Animal Health's Coopers Ectoforce Sheep Dip, and
numerous others in the pipeline. Aquasol has dedicated development facilities
near Chelmsford.

Aquasol currently has a turnover of around £400k of which a significant and
growing portion is in the form of royalties. Royalties and profit sharing that
would have been due to Aquasol under the collaborative agreement between
Stanelco and Aquasol, announced in November, will now remain within the Group.
Aquasol's last audited accounts showed a turnover of £476k net assets of £220k
and profits of £328.

Commenting on the Acquisition, Ian Balchin, Chief Executive of Stanelco, said
'We are delighted to welcome Aquasol into the Stanelco Group of companies. We
believe that our combined technologies and customer relationships will offer an
exciting opportunity for customers to become more eco-friendly whilst at the
same time significantly improving operating margins. We are making good progress
under our existing agreement and will report more on this in due course.'

Bruce Drew, the Managing Director of Aquasol, said: 'In the relatively short
time that we have been working with Stanelco, we have realised that together we
can effect a revolution in our sector of the packaging world. There is a good
fit between our technologies and the skill sets of our two teams. Everything is
now in place for rapid progress to be made. Having run an intellectual property
business for 11 years without any external funding, we know what it can take to
turn good IP into revenues. If you look at the combined IP that is still to be
properly exploited, one has to be optimistic'.


                                     ENDS-

For further information. Please contact:

Ian Balchin, Chief Executive
Stanelco plc                                     Tel: [phone]

Jonathon Brill
Financial Dynamics                               Tel: [phone]



Notes to Editors:

Stanelco was founded in 1953 and is a world leader in the development of radio
frequency technologies for processing polymers of edible and packaging
applications and the design and manufacture of optical fibre technology,
induction heating and dielectric welding equipment. The Company's current core
business is the manufacture of optical fibre using Radio Frequency (RF)
technology. Stanelco has been applying its technology to other markets and is
currently developing detergent capsules, foamed starch trays, edible sachets and
waste packing.

Aquasol is an intellectual property based company and a leader in the field of
developing water-soluble packaging and delivery systems. Aquasol's technology
and future direction have a strong strategic fit with those of Stanelco.



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