Kingston Buys Smart421

KINGSTON UPON HULL, U.K. -- Kingston Communications (HULL) PLC (“Kingston”) today announces the acquisition of Smart421 ("Smart421") for a cash consideration of £24.2 million, including cash and cash equivalents of approximately £4.0 million. Smart421 is a specialist in the area of business applications integration and increasingly delivers both integration and ongoing applications managed services to blue chip organisations.

The business has developed long term partnerships with its customers and currently provides services to some of Europe’s largest blue chip businesses including O2, Norwich Union, E2V and UPC.

SMART421, which will be managed as a discrete business entity, provides a complementary and strong strategic fit within Kingston and in particular, with Affiniti, our communications integration business.

In the year ended 30 June 2006, Smart421 reported turnover of £11.1 million (2005: £8.9 million) and profit before tax of £1.5 million (2005: £0.3 million). As at that date, the business had gross assets of £6.6 million, including a cash and cash equivalents balance of £3.4 million. On present performance, the acquisition will be immediately earnings accretive.

Commenting on the acquisition, Malcolm Fallen, Chief Executive of Kingston Communications, said: "The acquisition of Smart421 provides an exciting opportunity for Kingston. The business has an outstanding reputation in the applications integration marketplace, offering a high quality service to its customers. The Group will benefit from the immediate extension of application-related skills, particularly through Smart421’s Microsoft and IBM capabilities.”

Kingston Communications plc