Acquisition

Ricardo PLC
05 February 2003

5 February 2003



                            Ricardo plc ('Ricardo')
            Acquisition of Tarragon Embedded Technology ('Tarragon')

Ricardo, a world leading independent automotive engineering consultancy,
announces the acquisition of Tarragon Embedded Technology Limited, an automotive
systems software company, for a maximum consideration of up to £5.5million.

This acquisition significantly enhances Ricardo's electronic capability by
adding embedded software which, for example, controls engine management systems,
telematics which includes GPS location based systems and safety critical
redundancy systems, for example 'drive by wire'.  The market for automotive
electronics is expected to grow from 20% to 30% of the cost of a vehicle by
2010.  The drivers for this are legislation, safety and customer convenience
which have been significant drivers of Ricardo's business for the last 20 years.

The consideration comprises an initial payment of £3.1million satisfied as to
£1.9million in cash and by the issue of 426,000 new ordinary shares which will
rank parri passu after the date of issue, together with a two year earn-out
based on increases in profit before tax over and above current levels. If
Tarragon meets its earn-out targets the maximum consideration of £5.5million
will equate to a price earnings ratio of c. 7.5x.  In addition the vendors who
occupy senior management roles within Tarragon have agreed to remain in the
business for at least the duration of the earn-out.

For the year ending 31 January 2003, Tarragon generated profit before tax of
£350,000 on turnover of £3.24 million. Net assets at 31 January 2003 were
c.£500,000. This acquisition is expected to be earnings enhancing for the first
full year.

Tarragon, based in Cambridge, employs 52 people and is a leading designer and
developer of embedded automotive systems software and support tools for the
automotive industry.  Tarragon brings a new software capability to Ricardo,
filling a gap in Ricardo's fast growing and existing offering in systems
engineering, control strategy development and electronic hardware design and
development.

In addition, the acquisition increases Ricardo's existing controls and
electronics headcount by 50%. Post acquisition, Ricardo will have over 150
people, or 10% of our staff, dedicated to expanding its capability in this fast
growing technology area serving the world's OEM and Tier 1 suppliers.

Commenting on the purchase of Tarragon, Ricardo's chief executive Rodney
Westhead said:

'The acquisition of Tarragon is in line with our strategy to grow significantly
our electronic systems capability. This is an important area of future growth
for Ricardo and this acquisition significantly expands our service offering for
our automotive clients around the world.

'This acquisition follows our recent development in strategic consulting and the
acquisition of Gemini. These, together with Tarragon, add to our high added
value activities.'



Enquiries:


Ricardo plc                                                       01273 455611

Rodney Westhead, Chief Executive
Andrew Goodburn, Finance Director
Website : www.ricardo.com

Gavin Anderson & Company                                          0207 554 1400
Laura Hickman/Charlotte Stone




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