Acquisition of Alarity

Arc International PLC
24 September 2007


Media Contact:                                              Financial Contact:
Lee Garvin Flanagin                                         Juliet Clarke
ARC International                                           Financial Dynamics
[phone]                                             [phone]
[e-mail]                                        [e-mail]




                       ARC Acquires Alarity Corporation;

                   Establishes Multimedia Development Center

                           In St. Petersburg, Russia



         Alarity's World Class Multimedia Development Team Boosts ARC's
                 High Definition (HD) Product Development and

                        Custom Engineering Capabilities


ST. ALBANS, England, September 24, 2007 - ARC International (LSE: ARK) today
announced that it has acquired Alarity Corporation.  Alarity is a privately held
U.S. multimedia company that has a renowned team of close to 40 personnel based
in St. Petersburg, Russia specializing in codec software, firmware, and advanced
multimedia architectures.  The acquisition includes all of Alarity's employees
and its vast library of optimized solutions for standard definition (SD) and HD
video, hi-fidelity audio, imaging, DSP, and information security applications.



Alarity's development team already plays a key role in select engagements with "
Tier 1" customers creating multimedia solutions based upon ARC's configurable
processors and subsystems.  The acquisition will make available Alarity's full
set of resources to a broader number of ARC customers and prospects, enhance
ARC's ongoing multimedia product development efforts, and bolster its
customer-specific engineering capabilities.



Alarity's engineers are experts in HD video and image processing, hi-fidelity
audio algorithms, coding and compression, A/V pre- and post-processing,
encryption, digital watermarking, and digital rights management.  All of these
technologies are essential to create a complete next-generation system for HD
DVD, BluRay DVD, next-generation iPTV, and HDTV broadcast standards.

As part of the acquisition ARC has established a multimedia development center
in St. Petersburg, which complements ARC's existing centers in Cambridge and St.
Albans, England, and Silicon Valley.  Dr. Eugene Metlitski, co-founder and CTO
of Alarity, will join ARC's Office of the CTO currently staffed by Dr. Akash
Deshpande, Dr. David Greaves, Dr. Tom Pennello, and Dr. Nigel Topham.  Renowned
in the field of signal processing, computer architecture, and information
security, Dr. Metlitski has authored more than 50 books and papers, holds 9
patents in the field of computer science, and is a member of the editorial board
of an international technical journal.



Carl Schlachte, president and CEO of ARC International, said, "The acquisition
of Alarity supports ARC's strategy of providing comprehensive, integrated SoC
solutions for advanced multimedia applications.  In engagements with major
customers, Alarity has proven its ability to optimize algorithms, software, and
system architectures for highly efficient and ultra-low power operations.  By
being a full-time member of the growing ARC team, a broader set of customers
will benefit from the ability to quickly leverage Alarity's world-class
offerings for their high-volume SoC designs."



"This is an exciting time in ARC's history as the company grows its capabilities
in optimized multimedia hardware, software, and development tools," said Felix
Litvinsky, co-founder and CEO of Alarity, who also joins ARC as a vice president
of the company.  "We are very pleased to be joining ARC, and look forward to
extending the joint development work already underway to customers globally."



The consideration will be £2 million in cash.  An additional consideration of
£900,000 will be paid over two and half years based upon completion of certain
performance targets.  The acquisition may have a cost impact of up to £450,000
on ARC's financial year 2007 operations.



                                     # # #



About ARC International plc
ARC International is the world leader in configurable media subsystems and CPU/
DSP processors.  Used by over 140 companies worldwide, ARC's configurable
solutions enable the creation of highly differentiated system-on-chips (SoCs)
that ship in hundreds of millions of devices annually.  ARC's patented
subsystems and cores are smaller, consume less power, and are less expensive to
manufacture than competing products.



ARC International maintains a worldwide presence with corporate and research and
development offices in California and St. Albans, UK.  For more information
visit www.ARC.com.  ARC International is listed on the London Stock Exchange as
ARC International plc (LSE: ARK).



ARC and the ARC logo are trademarks or registered trademarks of ARC
International. All other brands or product names contained herein are the
property of their respective owners.  This press release may contain certain
"forward-looking statements" that involve risks and uncertainties, including the
development, implementation, and release of features described herein.  These
are at the sole discretion of ARC International.  Licenses from 3rd parties for
certain software and essential patents may be required depending on licensee's
use/implementation. For other factors that could cause actual results to differ,
visit the company's Website as well as the listing particulars filed with the
United Kingdom Listing Authority and the Registrar of Companies in England and
Wales.


                      This information is provided by RNS
            The company news service from the London Stock Exchange