Acquisition

Diploma PLC
17 September 2001



Diploma PLC has acquired 100% of Paul E. Volpp Tractor Parts, Inc. ('Pevco'), a 
distributor of seals and gaskets for use in the repair of mobile heavy-duty 
equipment. Pevco is based in Reno in the US.

The acquisition of Pevco represents a strategic expansion of our broader seals 
and components distribution business which includes Hercules Hydraulics Inc. in 
the US and Canada and FPE Ltd in the UK. In particular it provides access to new
customer segments in the US and into the wider international markets served by 
Pevco.

Pevco's profit before interest and tax for the year ended 31 December 2000, 
after adjusting for certain proprietorial expenses, was $0.2m (£0.1m), on sales 
of $10.4m (£7.1m). Its net assets as at that date were $2.6m (£1.8m).

The cash consideration payable was $2.45m (£1.7m), of which $0.5m (£0.3m) has 
been withheld in an escrow account. The consideration will be subject to a minor
adjustment related to net assets on completion. At completion, bank borrowings 
of $1.9m (£1.3m) were repaid by Diploma.