Acquisition of Security Businesses and Appointment of Director
07.12.2007

Servoca Plc, which provides specialist outsourced solutions to police forces, local and national government and companies throughout the private sector, is pleased to announce that it has acquired the entire issued share capital of both International Security & Surveillance Limited and ISS Special Projects Limited. The company is also pleased to announce the appointment of Glenn Swaby as Managing Director of Servoca’s security division.

Details on ISS
ISS trades from two locations with its head office based in the Thames Valley and an office in Edinburgh. ISS provides security and manned guarding services. ISS has a total staff including guards of approximately 150. In the audited accounts for the year to 30 June 2007 ISS achieved a profit before tax of £27k on turnover of £3.47m.

ISS’s main clients are blue chip organisations which are based within the aviation industry and the corporate commercial markets. In addition ISS is well placed within the theatre, arts and exhibition sectors. At 30 June 2007, ISS had audited net assets of approximately £307k.

Terms of the acquisition
Servoca will pay cash consideration of £0.7m and will issue 1,337,142 Servoca fully paid ordinary shares, which at a mid price of 44.5 pence each, equates to approximately £595,000.

Details on ISS(SP)
ISS(SP) also trades from one location based in the Thames Valley. ISS(SP) provides Intelligence led security solutions including close protection , risk management, surveillance and proactive security ISS(SP) has a total staff of 3.

The founder of ISS(SP) has agreed to remain with Servoca for a minimum of three years. In the audited accounts for the year to 30 June 2007 ISS(SP) achieved a profit before tax of £734k on turnover of £1.84m. ISS(SP’s) services are provided to substantial organisations based both in the UK and internationally that require confidential and low profile assignments to be undertaken. At 30 June 2007, ISS had audited net assets of approximately £159k.

Terms of the acquisition
Servoca will pay cash consideration of £0.87m and will issue 1,142,857 Servoca fully paid ordinary shares, which at a mid price of 44.5 pence each, equates to approximately £509,000.

The Directors believe that the acquisitions will be earnings enhancing and will allow Servoca to further develop its operations in both the policing and security markets as well as providing an additional service offering to Servoca’s current client base.

Funding
The Group has secured funding from The Royal Bank of Scotland Plc of £4.7 million for working capital and short term acquisition finance. The short term acquisition finance is being provided in the form of a secured loan secured over the assets of the Group and guaranteed by Southwind Limited. Southwind Limited is a related party by ownership of 10.4% of the Company’s issued share capital.

The Directors of the Company, having consulted with JMFinn Capital Markets, consider that the terms of the Southwind limited guarantee are fair and reasonable insofar as its shareholders are concerned.

Application has been made for 2,479,999 new ordinary shares to be admitted to trading on AIM. The new ordinary shares will rank pari passu with existing ordinary shares in the Company and trading in these shares on AIM is expected to commence at 8.00 am on 13 December 2007.

Commenting on the acquisition, Darren Browne Chief Executive said:
“We are delighted to have completed our first two acquisitions in the security sector. The acquisition of ISS and ISS(SP) will allow Servoca to provide wider service offerings to our existing client base as well as gaining an entry into the manned guarding, protection and surveillance services markets, which will provide Servoca with visibility of earnings which are profitable.”

In addition to the acquisitions of ISS and ISS(SP) we are pleased to announce the appointment of Glenn Swaby, aged 51, to the board of Servoca Plc. Glenn, a chartered accountant, has a wealth of experience within the security market and was until recently the financial director of First Security Group Limited, where he played a key role in the development of the Company over the past nine years. Glenn will have day to day responsibility for all Servoca Security brands.

We are pleased to welcome ISS and ISS(SP) to Servoca and look forward to working with their employees to help develop the businesses still further.”