Acquisition

23 May 2012

The Innovation Group plc

('Innovation Group' or the 'Group')

Acquisition of Marishal Thompson & Co (Environmental) Ltd

The Innovation Group plc (LSE: TIG.L), a global provider of business process services and software solutions to the insurance, fleet, automotive and property industries, is pleased to announce the acquisition of Marishal Thompson & Co (Environmental) Ltd ("MT") for a cash consideration of £5.2m. Following the acquisition, Paul Thompson, MT's sole shareholder, will remain as Managing Director of MT, which will form a part of the Group's Northern European Property division.

MT is one of the UK's leading providers of environmental consultancy, specialising in the provision of site investigation, mitigation, arboriculture, ecology, soil and root analysis with a core focus on subsidence insurance claims. Utilising a robust, scalable and bespoke technology solution, MT handles approximately 11,000 transactions per annum. Revenues and pre-tax profit for the year ended 30 September 2011 were £4.2m and £1.0m (before a one-off charitable donation of £0.3m) respectively. Gross assets at 30 September 2011 were £2.4m. The acquisition is expected to be earnings accretive in the first full year of ownership.

Based in Alnwick, Northumberland and employing over 65 people across the UK, MT will further enhance the Group's service proposition for its property insurance clients, as it will deliver stronger returns through a seamless, highly integrated service, shorten claim cycles and lead to synergy savings in claim handling costs. MT will continue to operate and trade as a standalone business and will handle all of the claims placed via the Innovation Group's UK subsidence claims business.

Commenting on the acquisition, Andy Roberts, CEO of The Innovation Group said:

"Marishal Thompson is an excellent strategic acquisition for the Group and for our UK subsidence business in particular. As one of the UK's largest providers of subsidence claims management services, MT's unique and unrivalled solutions will help us to further differentiate our own offering in this marketplace. This transaction is evidence of our strategy of investing in propositions that create true competitive advantage for the Group and significant value for our clients, built on the foundations of a strong track record of service delivery and balance sheet strength."

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About Innovation Group:

The Innovation Group plc (LSE: TIG.L) is a global provider of business process services and software solutions to the insurance, fleet, automotive and property industries. Innovation Group provides contact centres, repair networks, process management, supply chain and technology operations and decision support analytics to support accident management, repair and estimation and claims management services. Innovation Group has over 800 global clients including AXA, RSA, American Modern Insurance Group, LeasePlan, The Ford Motor Company, Aviva, Toyota and Zurich. The Group processes more than 4 million claims per year with 20 per cent direct claims cost saving achieved. Innovation's 2,300 people are located in the United Kingdom, Australia, Belgium, Canada, France, Germany, Japan, India, Pakistan, South Africa, Spain and United States. www.innovation-group.com