Acquisition

Diploma PLC
21 December 2001


Diploma PLC has acquired 100% of Clarendon Engineering Supplies Limited        
('Clarendon') a distributor of high performance fasteners, supplying principally
to the Motorsport market in the United Kingdom.

The acquisition of Clarendon fits well with Diploma's strategy of investing in 
Specialised Distribution businesses with the potential for growth and superior 
margins. Clarendon is a natural extension to Diploma's Interconnect activities 
which already include IS Motorsport, serving the UK and US Motorsport markets.

Clarendon's profit before interest and tax for the year ended 30 September 2001,
after charging certain proprietorial expenses, was £0.3m on sales of £2.1m. Net 
assets as at that date were £0.5m.

The initial consideration payable is £3.0m, subject to a minor adjustment 
related to net assets on completion. Further deferred consideration to a maximum
of £0.75m will be payable depending on profit performance during the year ending
30 September 2002. All of the consideration payable will be satisfied by the 
issue of Guaranteed Unsecured Loan Notes 2001-2003.