Acquisition

Ricardo PLC 30 June 2003 30 June 2003 Ricardo Plc ('Ricardo') Acquisition of the IFT Group of Companies for up to €35.25m (£24.31m) Expanding Ricardo's presence in Germany Ricardo, a world leading independent automotive engineering consultancy, announces the acquisition of the IFT Group ('IFT') for a maximum consideration of up to €35.25 million (£24.31m), significantly enhancing Ricardo's presence in Germany, the largest engineering services market outside of North America. IFT is a private company based in Schwabish-Gmund, the heart of the German automotive industry approximately 50Km from Stuttgart (Daimler Chrysler); 100 Km from Ingolstadt (Audi) and 200 Km from Munich (BMW). IFT employs circa 270 people and provides automotive engineering consultancy and engine and vehicle testing services to the German automotive industry. It is also a leading supplier of prototype, high performance and niche exhaust systems to customers including Porsche, Mercedes AMG, Opel and Ford. Following the acquisition Ricardo will have nearly 300 people based in Germany strengthening Ricardo's ability to serve existing clients as well as developing new client relationships. The consideration comprises an initial cash payment of €23.00 million (£15.86m), together with a one year earn-out based on increases in profit after tax over and above €2.30 million (£1.58m). If IFT meets its earn-out targets the maximum consideration of €35.25 million (£24.31m) will equate to a maximum price earnings ratio of c. 10x. In addition the vendors who occupy senior management roles within IFT have agreed to remain in the business for at least the duration of the earn-out. For the year ending 31 December 2002, IFT generated profit after tax of €2.50 million (£1.72m) on turnover of €31.20 million (£21.52m). Net assets at 31 December 2002 were €6.0 million (£4.14m). This acquisition is expected to be earnings neutral after integration costs for the first full year. Commenting on the acquisition of IFT, Ricardo's Chief Executive Rodney Westhead said: 'The acquisition of IFT is in line with our strategy to grow significantly our presence and capability in Germany, the largest automotive market in Europe. This is an important area of future growth for Ricardo and this acquisition significantly increases our ability to meet the requirements of our German customers and also brings a new complementary technology in exhaust systems. This acquisition follows our recent developments in strategic consulting and the recent acquisitions of Gemini and Tarragon which together add to our growing, high added value international activities.' Enquiries: Ricardo plc 01273 455611 Rodney Westhead, Chief Executive Andrew Goodburn, Finance Director Christopher Bates, Main Board Director with responsibility for Germany Website : www.ricardo.com Gavin Anderson & Company 0207 554 1400 Laura Hickman/Charlotte Stone This information is provided by RNS The company news service from the London Stock Exchange

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Ricardo (RCDO)
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