Acquisition

Northgate PLC
31 January 2006


31 January 2006


                          NORTHGATE PLC ('Northgate')

                  ACQUISITION OF ARRIVA VEHICLE RENTAL LIMITED
                            ('AVR' or the 'Company')

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
                 THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN

  THIS IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES, CANADA,
                               AUSTRALIA OR JAPAN


Introduction


Northgate, the UK's leading specialist in light commercial vehicle hire,
announces that it has entered into an agreement with Arriva Plc ('Arriva') to
acquire from a subsidiary of Arriva the entire issued share capital of AVR, a
prominent UK commercial vehicle hire company, together with certain properties
occupied by AVR but owned by other members of the Arriva Group. Northgate has
also announced today that it is placing 6,050,000 new ordinary shares of five
pence each (representing approximately 9.4% of Northgate's issued share capital)
(the 'Placing') to fund payment of the consideration in connection with the
acquisition. Completion of the acquisition is conditional upon the Placing
becoming wholly unconditional and is expected to take place on 3 February 2006.
Further details about the Placing are contained in the separate announcement
made by Northgate today.

Information on AVR

AVR is one of the major UK vehicle rental providers. The Company operates
through 33 branches in the UK in the light commercial vehicle, heavy commercial
vehicle and car rental markets. It has a fleet of over 11,000 vehicles.

For the year ended 31 December 2004 (the last year for which audited accounts
are available) AVR reported profit before interest, tax and amortisation of
£12.5million and at 31 December 2004 had gross assets of £167.8million and net
debt of £100.5million.

Details of the Acquisition

The consideration for the existing issued share capital of AVR is £53.9million,
of which £49.7million is payable in cash at completion with the balance becoming
payable on 30 June 2006. In addition, Northgate will procure the repayment of
approximately £106million of net debt owed by AVR and its subsidiaries to
external banks and will receive £30.6million from Arriva as settlement of
intercompany indebtedness (net of the consideration for other Arriva
properties). The consideration will be subject to adjustment by reference to a
net assets statement as at 31 December 2005.

The net amount payable of £129.3million will be satisfied by way of a placing of
6,050,000 new ordinary shares in Northgate, the terms of which have also been
announced today, with the balance payable in cash, funded from Northgate's
existing bank facilities.

Effects of the Acquisition

The acquisition of AVR builds on Northgate's existing position of leadership in
the UK market, in line with Northgate's strategic plan, and will create a light
commercial vehicle fleet, once integrated, in excess of 62,000 vehicles, while
at the same time providing wider coverage of the UK market.

The acquisition is expected to be earnings enhancing in the first full year
following completion, primarily as a result of purchasing synergies and
operational gearing benefits arising from the enlarged business.

Current trading

Following the announcement of Northgate's interim results to 31 October 2005 on
10 January 2006, the Board of Northgate confirms that there has been no change
to the current trading and outlook of Northgate.

Commenting on the acquisition of AVR, Martin Ballinger, Chairman of Northgate
said:

'We are delighted to announce the acquisition of Arriva Vehicle Rental which
significantly expands our UK rental operations building on our strategy outlined
in the recent interim results. This acquisition will enable Northgate to improve
customer service through wider UK coverage and at the same time derive benefits
from the economies of scale generated by the enlarged business.'

For further information, please contact:

Northgate plc                                           01325 467 558
Steve Smith, Chief Executive
Gerard Murray, Finance Director

Hoare Govett Limited
Corporate Broking
Andrew Foster / Bertie Whitehead                        020 7678 8000
Corporate Finance
Julian Goodwin / Stephen Bowler                         020 7678 8000
Syndicate
John MacGowan                                           020 7678 1084

Hogarth Partnership Limited                             020 7357 9477
Andrew Jaques
Barnaby Fry


Notes for Editors

Northgate plc rents light commercial vehicles and sells a range of fleet
products to businesses via a network of hire companies. Their NORFLEX product
gives businesses access to a flexible method to acquire as many commercial
vehicles as they require.

Further information regarding Northgate plc can be found on the company'
website:

http://www.northgateplc.com


Arriva Vehicle Rental

As at 30 June 2005, AVR had a fleet of 11,769 vehicles, of which 8,616 were
light commercial vehicles, 485 heavy commercial vehicles and 2,668 cars.

AVR employs 655 employees, of whom 140 are part-time employees

Further information on AVR can be found at www.arrivarental.co.uk

This announcement is for information purpose only and does not constitute an
offer or invitation to acquire or dispose of any securities or investment advice
in any jurisdiction.

This written announcement is not an offer of securities for sale in the United
States. The new Ordinary Shares may not be offered or sold in the United States
absent registration under the US Securities Act of 1933, as amended (the 'US
Securities Act') or an exemption therefrom. Northgate plc has not and does not
intend to register any securities under the US Securities Act and does not
intend to offer any securities to the public in the United States. No money,
securities or other consideration from any person inside the United States is
being solicited and, if sent in response to the information contained in this
announcement, will not be accepted. The new Ordinary Shares have not been and
will not be registered with any regulatory authority of any state within the
United States



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