Acquisition

Quarto Group Inc
13 July 2004


            Quarto in $10.8 million Acquisition of US Book Publisher

Implementing the first phase of its growth strategy, Quarto, the London-based
and listed international book publisher, announces the acquisition of the
business of Creative Publishing international (CPi), a publisher of how-to books
based in Minneapolis, USA.

The business being acquired publishes books in three categories: home
improvement, lifestyle (including crafts), and outdoor activities, all special
interest areas in which Quarto is already involved. The books are principally
sold through bookstores and appropriate special interest retailers, e.g. major
home improvement stores such as Home Depot, and Lowe's.

Laurence F Orbach, Quarto's chairman and chief executive officer, said ' On
March 2nd, the Board announced a growth strategy for Quarto through making
selective and significant acquisitions, and accelerating organic initiatives. We
are already boosting internal growth, with the launch, this month, of a new
educational imprint. We are now taking the first step to implement our
acquisition plans. CPi fulfils our criteria exactly. It publishes how-to and
lifestyle books, is based in the world's largest publishing market, and has a
very strong market position. Over the past 15 years, CPi has developed
high-quality books featuring step-by-step photography, with nationally
recognized brand partners like Black & Decker and Singer, the most respected and
trusted names for consumers involved in home improvement and needle crafts. Its
books reprint strongly, with backlist sales providing over 80% of revenues'.

The consideration, for the net assets being acquired, is $7.5 million in cash,
at closing, and $3.3 million in a convertible promissory note. As of December
31, 2003, the net assets being acquired had revenues of $18.3 million, and a
book value of $7.9 million (this latter figure will be adjusted, as described
below, to conform to Quarto accounting policies and practices). The acquisition
is being financed by the provision of an additional $15 million facility by
Lloyds Bank, which is joining Quarto's existing syndicated loan facility, and
increases it to $60 million. The acquisition is expected to close in August.

'We expect the operating profit contribution from CPi to be in excess of our
publishing division target of 10% of sales, and to enhance earnings on a full
year basis. CPi is a pretty perfect fit with various other parts of Quarto and,
additionally, because of its already substantial size, will allow us to leverage
our book publishing infrastructure much more effectively. We continue to
investigate further acquisition opportunities,' continued Mr Orbach. 'We're
delighted that Lloyds TSB has decided to increase its involvement with Quarto.
It's a tremendous vote of confidence in the Board's strategy, and the company's
management.'

                                   **********

Ken Fund, President and CEO of Quarto's Massachusetts-based Rockport unit, and
formerly of Simon & Schuster and HarperCollins Publishers, will oversee CPi's
operations, with Linda Ball remaining in place as Publisher of CPi.

The Rockport Publishing Group is made up of Rockport and its imprints Fair Winds
Press and Quarry Books, as well as U.K.-based RotoVision and Apple Press. The
acquisition will double the size of the Rockport Group.
'This acquisition marks a major turning point for us,' says Ken Fund. 'The
Rockport Group is the strongest it's ever been. We're dramatically outperforming
past years and we're well-positioned for growth'
Founded in 1984, Rockport Publishers creates beautifully illustrated source
books for professional designers and artisans in the categories of graphic
design, architecture, and interior design. Its newest imprint, Quarry Books,
provides practical general reference books in categories such as crafts, home
decorating, pet care, and personal improvement. The group has experienced
significant growth in the past three years from Fair Winds Press, Rockport's
mind, body, spirit imprint, launched in 2001.

'Founded in 1969, CPi is a leader in how-to books on topics including home
improvement, home decorating, sewing and crafting, and outdoors. We're
experiencing a renewed sense of enthusiasm,' says CPi publisher Linda Ball.
'It's very exciting for us to join forces with a company like Rockport, with
such a successful track record.'

'It's clearly a natural fit,' added Fund, who says: 'By pooling resources and
sharing ideas and knowledge between the two companies, we see only opportunity
after opportunity for growth throughout the Group. We're very excited about the
future.' Fund also said that both companies will maintain separate and distinct
identities.

                                   **********

The book value of the net assets being acquired, which comprises the major part
of the net assets of Creative Publishing international, Inc., will be adjusted
to conform to Quarto's accounting policies and practices. The most significant
adjustment will relate to book production costs (excluding printing costs). CPi
currently capitalises these costs, and amortises them over their estimated
useful life. Quarto charges these costs against the first printing of a book.
The effect of this, and other, adjustments necessary to conform to Quarto's
policies and practices will be to reduce the book value of the net assets by
approximately $10 million.



Notes for Editors:

Quarto's International Co-edition Book Publishing Division creates books which
are licensed to other publishers for publication internationally. It also
includes Regent and ProVision, which are Far East-based print broking and
production services businesses, serving both third parties and the Group.

Quarto's Publishing Division primarily publishes books, under imprints owned by
the Group, and art prints, mainly for their domestic markets in the US and
Australia. In addition, it includes two UK-based publishing services businesses
primarily serving the point of sale display market, Western and AP Screen.

In the year ended December 31, 2003, underlying pre-tax profit rose by 12.2% to
£5.7m and underlying EPS by 5.7% to 22.3p - a fifth successive year of increase
in underlying EPS. Dividends per share of 5.75p were up 10% and covered 3.9 x by
underlying EPS.

A Delaware registered corporation, Quarto's Head Office is situated in City
Road, London EC1V 2TT, and its shares are fully listed on the London Stock
Exchange.

Enquiries:

The Quarto Group, Inc
Laurence F Orbach (Chairman & CEO)                           020-7700 9003
Mick Mousley (Chief Financial Officer)                       020-7700 9005

Bankside Consultants Limited
Charles Ponsonby                                             020-7444 4166
Ian Payne                                                    020-7444 4168


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