Acquisition

McInerney Holdings PLC
21 January 2002

Monday, 21st January 2002

               McINERNEY HOLDINGS plc

          ACQUIRES CHARLTON GROUP (UK) LIMITED

McInerney Holdings plc ('McInerney' or 'the Group') is pleased to announce that
it has acquired Charlton Group (UK) Limited and its subsidiary companies ('the
Charlton Group' 'Charlton' or 'the Company') with effect from 18th January 2002.

The Charlton Group is a successful Lancashire development and construction
company. Charlton was founded in 1987 as a civil engineering contractor by its
Chief Executive Paul Bolton, the Group's major shareholder. Its principal
activities currently include house building and apartment development with
strong brand names Charlton Homes and Space. The Company's operations are mainly
focused at the key regional centres of Manchester, Liverpool and Chester.

McInerney's strategy is to secure high growth rates, both organically and by
acquisition, in its three chosen markets of Ireland, the UK and Iberia. The
Charlton acquisition is part of that strategy. A progressive management team is
in place at Charlton, with experience and vision, which will further benefit
from McInerney's stewardship. The Group is confident that significant
integration synergies can be achieved by closer co-operation with its existing
UK operation.

Consideration

The total consideration for the acquisition is stg£8.05million (€12.984m) which
is payable as follows:

  • An initial consideration of stg£5.55million (€8.952m) payable in cash and
    bank guaranteed loan notes at completion;
  • Additional consideration of stg£0.5million (€0.807m) payable in bank
    guaranteed loan notes subject to the successful achievement of short term
    operational targets in 2002;
  • Additional earn-out consideration may become payable by McInerney
    depending on the profit before interest and tax (PBIT) achieved by the
    Charlton Group in the three year period ending 30th September 2004. The earn
    out calculation will be based on an annual threshold PBIT of stg£1.34million
    (€2.161m). The vendors will receive 50% of PBIT earned in excess of this
    threshold, subject to an overall maximum earn out of stg£2million (€3.225m).

Business

Charlton is an established regional house and apartment builder that completed
240 units in the year to 30th September 2001. The Company specialises in
brownfield development with almost 90% of its recent developments on
re-developed sites. This expertise gives Charlton a competitive advantage
following the recent PPG3 UK directive requiring 60% of new housing development
nationwide to be carried out on brownfield sites.



The Charlton Homes division has three distinct target markets. It provides
affordable starter homes and apartments for the price conscious first time buyer
market in satellite towns such as Northwich and Warrington. In addition, it
focuses on providing quality-designed homes for the more discerning purchaser.

Through the SPACE brand, it caters for the affluent market through its supply of
loft style apartment developments in key population centres. A recent example is
its successful redevelopment of a 1930's art-deco building in Liverpool
providing 115 apartments and ground floor commercial units. John Rocha, the
Irish designer, advised on design aspects of this development.

Results

The Charlton Group reported a Profit before Tax of stg£1,557,699 (€2,512,418)
for the year ended 30th September 2001. The Net Assets at 30th September 2001
were stg£2,352,338 (€3,794,094).

The acquisition of the Charlton Group gives McInerney a stronger foothold in the
currently buoyant UK housebuilding market. This market has recovered
significantly in recent years with overall price rises of 9.4% and 13.8% in 2000
and 2001 respectively. It ended 2001 with considerable momentum with prices
rising nearly 2% in December alone.

Barry O'Connor, Managing Director, McInerney Holdings plc said today: 'This move
is part of our high growth strategy. It is in line with our objective of
spreading our capital base for the highest return across our three chosen
geographical markets. Following our foothold acquisition of WHL in 1999,
Charlton is a logical, strategic development for us in the UK. It is our
intention to provide the necessary capital to assist Charlton to further expand
its home building activities. The North-West region, with a population of

8 million people, has benefited from the buoyant demand for housing in the UK.
The Group is satisfied that the acquisition of the Charlton Group is a good
cultural fit and combined with our existing operations in the region, will
establish McInerney as a regional branded niche house-builder in the
North-West.'



FOR FURTHER INFORMATION:

Siobhan Molloy, FCC Shandwick          Tel: [phone] 50 66



Notes to editors:

  • Euro Rate 1 = 0.62stg
  • WHL - William Hargreaves Ltd, based in Bolton.




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