Acquisition

Diploma PLC
15 July 2004



FOR IMMEDIATE RELEASE                                               15 July 2004



            DIPLOMA ACQUIRES 80% OF SOMAGEN DIAGNOSTICS INC. FOR A 
                        MAXIMUM OF £13.1m(C$32.0m)

          EXPANSION OF LIFE SCIENCE ACTIVITIES INTO GROWING CLINICAL 
                   DIAGNOSTICS MARKET IN NORTH AMERICA

Diploma PLC, the international specialised distribution group, is pleased to
announce the acquisition of 80% of Somagen Diagnostics Inc. ('Somagen'), a
leading supplier to the clinical diagnostics market in Canada. Somagen is based
in Edmonton, Canada where it operates from a 16,000 square foot freehold
facility and employs 52 staff.

Somagen supplies a range of consumables and instruments used in the diagnostic
testing of blood, tissue and other samples in hospital laboratories. Consumable
products are in the form of chemical reagents and often packaged as kits to
enable the analyst to carry out a complete testing routine. A large part of
Somagen's revenues are generated from reagent rental contracts with terms
ranging from one to five years. An instrument is provided to the customer in
return for a commitment to minimum annual purchases of reagents.

Somagen's principal customers are the 500-600 laboratories within hospitals
across Canada. The top 15 customers together represent ca. 25% of total sales
and no one customer individually represents more than 5% of sales. Somagen has
exclusive long-term distribution agreements for Canada with a range of suppliers
from the US, Japan and Europe. No one supplier represents more than 25% of
sales.

Somagen's operating profit in the year ended 31 August 2003 was C$4.5m (£1.8m)
on sales of C$21.5m (£8.8m). After paying certain shareholder bonuses (which
will not apply after acquisition), profit before tax was C$0.4m (£0.2m). Net
assets at 31 August 2003 were C$2.2m (£0.9m) and at completion are expected to
be approximately C$5.0m (£2.0m), including net debt of approximately C$1.0m
(£0.4m).

The initial cash consideration to be paid, which will be met from the Group's
existing cash resources is C$30m (£12.3m) before acquisition costs. This may be
subject to a minor adjustment based on the net assets at completion. Further
deferred consideration up to a maximum of C$2m (£0.8m) will be payable depending
on the operating profit of Somagen in the year ending 30 September 2005. To
achieve the maximum deferred consideration, Somagen would have to generate an
operating profit of at least C$6.0m (£2.5m).

The minority interest of 20% in Somagen will be retained by the three managers
and previous owners of the business, who will continue to work for Somagen. Put
and Call options exist over the minority shares which can be exercised after
three and five years, based on an agreed multiple of earnings and subject to a
maximum cap.

The acquisition of Somagen represents a strategic expansion of the Group's Life
Science business into the market for clinical diagnostics in North America. This
is expected to open up further new opportunities for expansion, both organically
and through acquisition, in Europe and North America.

Bruce Thompson, Chief Executive of Diploma PLC said:

'The acquisition of Somagen represents an important strategic step into the
growing clinical diagnostics market, an attractive extension to our existing
Life Science activities. Somagen will enable us to exploit similar opportunities
for expansion in both North America and Europe. In addition Somagen meets our
demanding acquisition criteria of being a company which offers specialised
products and services with the potential for growth and superior margins.'


For further enquiries please contact:

Bruce Thompson, Chief Executive Officer   020 7638 0934
Nigel Lingwood, Group Finance Director    020 7448 4875
Ian Seaton, Bankside Consultants          020 7444 4157
Heather Salmond, Bankside Consultants     020 7444 4148






NOTE TO EDITORS:

Diploma PLC is a specialised international distribution group operating in three
sectors:

Life Sciences - supply of Instrumentation, Consumables and Service to the
research laboratories of the major pharmaceutical and biotechnology companies,
universities and research institutions. Principal companies are Anachem in the
UK and a1-envirotech in Germany.

Seals & Components - a next day delivery service for hydraulic seal kits,
gaskets and cylinder components, supplied to repair and maintenance operations
(RMOs) serving a broad range of mobile machinery aftermarkets. Principal
companies are Hercules Bulldog Sealing Products in North America and FPE in the
UK.

Controls & Interconnect - distributors of specialised wiring, connection and
control devices into a range of technically demanding applications. Principal
companies are IS Rayfast, Clarendon and Hawco in the UK and Sommer and Filcon in
Germany. IS Motorsport, based in the UK, also has a start-up operation in the 
US.

Within each of these sectors, the Diploma businesses serve industry segments
with long term growth potential and with the opportunity for sustainable
superior margins through the quality of customer service, depth of technical
support and value adding activities.

In the year ended 30 September 2003, Diploma reported sales of £77m and pre tax
profits of ca. £13m.

Further information on Diploma PLC can be found at www.diplomaplc.com




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