Acquisition

Stadium Group Plc

("Stadium" or the "Company")

Acquisition of United Wireless Limited

Earnings enhancing addition to broaden integrated technology product and design capability

Stadium Group Plc (AIM: SDM), a leading electronic technologies group, announces the acquisition of the entire issued share capital of United Wireless Ltd ("United"), a specialist in the design and manufacture of electronics for the machine-to-machine (M2M) wireless sector, for a maximum total consideration of £8m in cash and shares.

The acquisition is expected to be significantly earnings enhancing in the first full year of ownership by Stadium and will complement the Company's existing technologies, presenting significant potential growth opportunities and synergies.

Stadium will pay an initial consideration of £6.0m to acquire United, to be satisfied by £5.0m in cash and the balance of £1.0m by the issue of 1,515,152 Stadium shares (the "Initial Consideration Shares") on completion. The cash consideration will be paid using a new five year revolving credit facility of up to £5m provided by Stadium's existing banking partner HSBC. Application has been made for admission of the Initial Consideration Shares to trading on AIM and dealings are expected to commence on 31 July 2014. United is being acquired on a cash and debt free basis.

The current owners and joint managing directors, each of whom will remain with United, have agreed to retain the Initial Consideration Shares for a minimum period of two years following Completion. The Company will make an additional earn-out payment of up to £1.33m in Stadium shares and £0.66m by way of loan notes if United exceeds certain defined earn-out targets.

About United

United specialises in the design and manufacture of M2M wireless solutions that support wireless connectivity between devices across wireless technology, primarily cellular networks. The business acts as a specialised M2M wireless integrator for OEMs (Original Equipment Manufacturers) requiring a complete end-to-end connectivity solution for their equipment or devices. United has a strong customer presence in the automotive and telematics sectors, and also works with OEMs in the areas of 'infotainment' and vending, industrial equipment and asset tracking. United was established in 2009, is based in Warrington, Cheshire and employs 40 people.

Global demand for M2M wireless devices is forecast to expand at a 24% compound annual growth rate over the next 5 years, with the number of cellular M2M device subscribers to rise to 490 million by 2018 (Source: Berg Insight Research 2013).

During the first 9 months of its current financial year pre-acquisition, United delivered unaudited sales of £6.0m and EBIT of £0.9m. Unaudited aggregate net assets acquired as at 30 June 2014 were £0.3m. For the remainder of the year, under Stadium ownership, after transaction-related and integration costs, it is expected that United will make a small contribution to the Group's profits. The acquisition is expected to be significantly earnings accretive in 2015.

The addition of a business with an expertise in M2M wireless technology will strengthen Stadium's integrated technology sales strategy. As a result, Stadium will be able to provide both existing and new customers with turn-key design capabilities covering power supplies, electronic manufacturing services, interface and displays and now wireless connectivity to deliver a fully integrated electronics technology solution.

Charlie Peppiatt, Chief Executive Officer of Stadium, said: "This acquisition establishes Stadium as a credible player in the fast growing market for M2M Wireless Devices. The successful integration of United will deliver the next step of our strategy to become a design-led electronics business by adding wireless connectivity to our integrated technology offering. I am confident that this acquisition will generate significant value for Stadium shareholders.

"As we stated in our pre-close trading update earlier in the month, trading in the first half of the year was in line with management expectations and significantly ahead of the same period last year and we remain confident about prospects for the year. I look forward to updating shareholders following the release of our financial results for the six months ended 30 June 2014 on Tuesday, 9 September 2014."

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