Acquisition

07 February 2017

TP Group plc

 ("TP Group" or the "Company" or the "Group")

Acquisition of ALS Technologies and Flexible Software Solutions

Acquisitions enhance existing offerings into defence, commercial and aerospace sectors

TP Group (AIM: TPG), the specialist services and engineering group, announces that it has reached an agreement to acquire the entire issued share capital of ALS Technologies Ltd ("ALS") and Flexible Software Solutions Ltd ("FSS") for a combined initial consideration of £1.25 million, funded from the Group's existing cash resources, on a debt free cash free basis. A further consideration of up to £1.5 million will fall due on delivery of profit related earn-out targets over the first 20 months from completion. The maximum consideration payable for ALS and FSS, assuming all earn-out targets are met, is £2.75 million.

ALS, based in Wincanton, Somerset, provides systems engineering and assurance capability for mission support, flight control, combat systems and tactical information systems in the aerospace and defence markets. FSS, also based in Wincanton, develops safety-critical software for the defence and commercial sectors.

The TPG Board believes that the acquisition of both ALS and FSS will deliver significant synergy benefits to the group, which include:

· extending TPG's existing services business activity in the provision of specialist resources in systems engineering and technical project support to defence and other sectors;

· the addition of software solutions will enhance and strengthen TPG's existing capabilities;

· access to additional strategic customers and programmes; and

· the ability to cross sell new capabilities to existing TPG customers.

ALS reported revenues of £4.3 million and profits before tax of £0.5 million in the financial year ended 30 September 2016. As at 30 September 2016, ALS had gross assets of £0.8 million. FSS generated revenues of approximately £0.2 million and was approximately breakeven in the year ended 31 December 2016. As at 31 December 2016, FSS had gross assets of approximately £0.1 million.

Mr Steve Lafferty and Mr Steve Bray, directors of both companies, will remain with the businesses and continue to lead activities and operations in Wincanton.

The purchase consideration will be financed from TP Group's existing cash resources. The TPG Board believes that the acquisition of ALS and FSS will be accretive to Group earnings in the year of completion.

Phil Cartmell, Chief Executive of TP Group, commented:

"We are delighted to have agreed the purchase of ALS and FSS and that the existing directors Steve Lafferty and Steve Bray will stay with the businesses post acquisition. The enlarged Group will bring critical mass to our services business and should stimulate growth in both ALS and FSS, as they benefit from greater market reach and presence delivered by TPG.

"I look forward to welcoming our new colleagues to the TPG team and driving continued growth and value in the coming years."

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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Notes to Editors

TP Group designs and develops advanced technologies, engineers complex equipment and systems, and provides support throughout their operational life. The Company's shares have been traded on AIM since July 2001.