Acquisition of Oil Productions Limited and Issu...

Introduction

Milestone  Group PLC ("Milestone"  or the "Company"),  the AIM quoted (AIM: MSG)
provider of digital media and technology solutions, is pleased to announce:-

1.    the  acquisition of  the entire  issued share  capital of  Oil Productions
Limited  ("Oil") for a  consideration of up  to £600,000 ("Consideration") to be
satisfied  in three tranches.  The first tranche is being satisfied by the issue
of 20,000,000 new ordinary shares in the Company at a price of 1 penny per share
("Issue of Equity").

The  second  and  third  tranches  of  the Consideration may be satisfied either
through  the issue  of new  ordinary shares  in the  Company or  in cash, at the
discretion of the Company.

2.     a Placing of 20,189,300 new ordinary shares ("Placing Shares") at a price
of  1 penny per share raising £201,893  (the "Placing").  A warrant to subscribe
for  additional new ordinary shares  in the Company is  attached to each Placing
Share, as described below.


Oil Productions Limited

Oil is a multi-platform digital media design studio that uses digital production
techniques  to  create  low-cost,  high-value  content.  Founded in 1998 by Mike
Bennett  and Mark McKeown, Oil has developed an established list of high calibre
clients,  including  Lynx,  Channel  4, BBC  and  Unilever,  delivering numerous
successful campaigns.

Mike  Bennett and  Mark McKeown  will remain  on the  Board of  Oil and  will be
joining the operational team at Milestone.

Mike, currently Chief Executive and Creative Director at Oil, has spent the last
15 years  pioneering new agency  models and content  businesses.  His creativity
and leadership have been recognised by BAFTA, D&AD, MILIA, Palme d'Or and BIMA.

Mark, currently Chief Operating Officer at Oil, has extensive experience in both
production and commercial development across a wide range of platforms. Mark has
managed  multi-discipline commercial and  technical teams for  a number of years
and has an expert knowledge of games, interactive drama and interactive TV.

For  the year  ended 31 March  2011 Oil had  a turnover  of £386,510 recording a
small loss before tax.


Issue of Equity

The  first tranche of the Oil  consideration of £200,000 is payable immediately.
Consequently,  the Company  has issued  20,000,000 ordinary shares  of 0.1 pence
each  in the  capital of  the Company  at a  price of  1 penny per  share to the
shareholders of Oil.

The   second  and  third  tranches  become  payable  on  the  first  and  second
anniversaries   of   the   Completion  Date  respectively,  subject  to  certain
performance criteria being achieved by Oil.


Placing

The  Company has issued 20,189,300 new ordinary shares at a price of 1 penny per
share, raising £201,893.  The proceeds of the Placing will be used as additional
working capital for the Company.

Following  the Issue of Equity  and the Placing described  above the Company has
applied  for the  40,189,300 new ordinary  shares to  be admitted  to trading on
AIM.   Trading in the new  ordinary shares is expected  to commence on or around
18 August  2011.  The new ordinary shares will rank pari passu with the existing
ordinary  shares.  Following the Placing and Issue of Equity the enlarged issued
share  capital of the Company will  comprise 286,251,525 ordinary shares of 0.1
penny each.


Issue of Warrants

Attached  to each  of the  Placing Shares  is a  warrant entitling the holder to
subscribe for new ordinary shares in the Company on the basis set out below:-

 1. 50% of the number of Placing Shares held at an exercise price of 1.75 pence
    per share which may be exercised up until the first anniversary of the
    Placing, and

 2. 50% of the number of Placing Shares held at an exercise price of 2.25 pence
    per share which may be exercised up until the second anniversary of the
    Placing.

No application will be made for the warrants to be admitted to trading on AIM.


Deborah White, Chief Executive Officer, said:

"We  are delighted to announce the Company's  acquisition of Oil.  Over the last
few  years we  have been  repositioning the  Company as  a full  service digital
solutions  company and today's  acquisition marks a  significant step forward in
achieving  this objective.  Oil  has an established  industry-renowned team that
has produced award-winning work for some very well-known brands. We look forward
to working with the team to further develop their offering and to take advantage
of the significant opportunities available as a result of this partnership."


Mike Bennett, Chief Executive Officer of Oil, commented:

"Oil  Productions has  spent the  last 3 years  creating ground  breaking, award
winning  projects  for  brands  and  broadcasters.  Milestone  is one of the few
organisations  we've come across who understand this approach and the tremendous
value  it can bring. It's a very exciting  time for us and we're delighted to be
working  with Deborah and her  team and believe the  collective vision will take
the business onto far greater success over the coming months and years."


For further information:

 Milestone Group PLC

 Deborah White, Chief Executive                    Tel: [phone]



 Cairn Financial Advisers LLP, Nominated Adviser
 Liam Murray / Avi Robinson                        Tel: [phone]



 Hybridan LLP, Broker
 Claire Louise Noyce                               Tel: [phone]


 College Hill, PR
 Jamie Ramsay                                      Tel: [phone]








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Source: Milestone Group PLC via Thomson Reuters ONE

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