Acquisition

Tribal Group PLC
19 October 2004


19th October 2004

Acquisition of Strategic Information Technology Services Group Limited

Tribal Group plc ('Tribal Group'), the provider of consultancy and professional
support services to the UK public sector, is pleased to announce that it has
acquired Strategic Information Technology Services Group Limited ('SITS') for a
total consideration of up to £14.0 million.

SITS is the leading provider of student administration software systems and
related services to UK higher education institutions, and has a significant
market share. The business has been established for over 15 years and currently
has more than 100 customers. It employs 72 staff from offices in Hull and
Stirling.

SITS will operate as part of Tribal Technology, the IT division of Tribal Group.
Tribal Technology is already a leading provider of management information
systems to the UK education sector, primarily servicing further education
colleges and local education authorities. The SITS customer base is therefore
highly complementary and extends Tribal Technology's involvement into all areas
of post-16 education.

In the 12 months ended 30 November 2003, SITS generated profit before tax of
£1.1 million and had net assets of £3.2 million at the end of that period.
Future revenue growth is underpinned by significant support and maintenance
income which currently represents approximately 40 per cent. of turnover.

Tribal Group has today acquired 100% of the issued share capital of SITS, which
represents 79.8% of the fully diluted share capital. Holders of options are
expected to exercise their rights to acquire SITS shares and Tribal Group
expects to complete the acquisition of these remaining shares within 28 days.
The consideration payable in respect of the 79.8% of the fully diluted share
capital acquired was £8.1 million, satisfied as follows:

• £6.2 million in cash and loan notes; and
• £1.9 million by the issue of 1,002,654 new ordinary shares of 5p each
  in Tribal Group.

Total initial consideration for the entire issued and to be issued share capital
will be £11.0 million, satisfied as follows:

• The consideration outlined above for the 79.8% of the diluted share
  capital;
• £2.4 million in cash and loan notes; and
• £0.5 million by the issue of additional new shares of 5p each in Tribal
  Group, the number of shares to be determined by the average share price over 
  the 7 days prior to the issuance of the shares, or, at Tribal Group's option, 
  loan notes.

The cash and loan note element of the total initial consideration includes a
payment, on a £ for £ basis, of approximately £4.3 million for cash within the
business, which includes proceeds from the exercise of share options.

In addition to the total initial consideration, deferred consideration of up to
£2.8 million will be payable based on the operating profit for the sixteen
months ending 31 March 2005. In addition, up to a further £0.2 million would be
paid following agreement of the corporation tax position of SITS for the year
ending 30 November 2004. The deferred consideration will be satisfied by the
issue of new Tribal Group shares or, at Tribal Group's option, loan notes.

Application will be made for the admission of the 1,002,654 shares to be issued
as initial consideration to trading on the Official List of the London Stock
Exchange. It is expected that these shares will be admitted to the Official List
on 22 October 2004. The shares will rank pari passu in all respects with the
existing ordinary shares of 5p each in Tribal Group. The SITS vendors have given
an undertaking not to sell the shares issued as part of the initial
consideration for a period of 12 months.

Commenting on the announcement, Henry Pitman, Chief Executive of Tribal Group
said:

'We are delighted that SITS has agreed to join Tribal Group. It will complement
our software and consulting offering to the education sector and significantly
enhance our presence in the Higher Education market.

SITS is a high quality business run by an excellent management team and there is
a strong cultural fit with Tribal Technology. The acquisition is an important
step in the development of Tribal Technology which now has a comprehensive range
of student administration systems addressing the whole of the post-16 education
sector.'

For further information contact:

Henry Pitman, Chief Executive    Tribal Group plc           Tel: [phone]

Colin Browne                     The Maitland Consultancy   Tel: [phone]


End






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