Acquisition

Hill & Smith Hldgs PLC
27 August 2002



Hill & Smith Holdings Plc ('Hill & Smith')

Acquisition of Mallatite Limited and Subsidiaries ('Mallatite')

27 August 2002



Hill & Smith is pleased to announce that, on Friday 23 August, it completed the
acquisition of the share capital of Mallatite, together with its wholly owned
subsidiaries, Mallatite (Scotland) Limited and Mallatite (Powder Coatings)
Limited, for a consideration of approximately £3.2m.

Mallatite, based in Manchester, with operations in Derbyshire and Glasgow,
manufactures and supplies street lighting columns, steels posts for road traffic
signs and telecommunications equipment and distributes powder coatings for the
corrosion protection of metal. Based on the audited accounts to 31 August 2001,
Mallatite has net assets of £1.0m and generated an operating profit of £0.2m
from a turnover of £8.9m.

The purchase consideration is being satisfied by £1.9m in cash, loan notes of
£0.9m and the issue of ordinary shares in Hill & Smith to the value of £0.4m at
the agreed issue price of 81 pence per share. In addition, bank debt of
Mallatite of £1.8m is being assumed by Hill & Smith.

Application has been made for 504,859 new ordinary shares, which will rank pari
passu (save as set out below) with the Company's existing issued ordinary
shares, to be admitted to the Official List of the UK Listing Authority and for
such shares to be admitted to trading on the London Stock Exchange's market for
listed securities, which is expected to occur today. These shares will not rank
for any dividend declared or paid prior to the final dividend in respect of the
financial year ending 31 December 2002.

Commenting on the acquisition, the Chief Executive, David Grove said:

'We are acquiring Mallatite because it is a leading lighting column manufacturer
with great innovative strengths and trades in a market estimated at £50m
annually. This will expand our product range in the Highways infrastructure
market and with the potential replacement of some 4.8m lighting columns, 66% of
the current street lighting stock over the next 10 years, this will provide a
significant benefit to Hill & Smith. Mallatite will benefit from a number of
synergies within Hill & Smith, including economies of scale, which will have a
positive effect on its overall profitability'.





Enquiries:

David Grove, Chief Executive      07973 325667








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