Umeco plc ("Umeco") is pleased to announce that its Repair and Overhaul subsidiary AEM Limited ("AEM") has acquired all of the issued share capital of Avionics Mobile Services Limited ("AMS") for an initial consideration of £1.25 million payable in cash.

AMS is a leading designer and installer of electronic equipment for the business aviation sector, and provides a full overhaul service for such equipment. The company is based in St. Albans and currently employs 24 staff. Customers include Harrods Aviation, ScotAirways, Air Alps and Jet Aviation.

In the year ending 30 June 2003 it had sales of £1.6 million (2002 : £2.5 million) and a loss before tax of £0.2 million (2002 : profit - £0.4 million). This loss was caused by a short term decline in volumes as customers delayed orders while awaiting the implementation of new European airworthiness directives from the European Airworthiness Authorities. Since implementation, volumes have recovered. Net assets at 30 June 2003 were £1.0 million including cash balances of £0.1 million. Additional consideration will be payable in 2006 based on five times the average annual profit before tax of AMS for the two year period from 1 July 2004 to 30 June 2006, less the initial consideration other than the first £0.13 million. The total consideration payable for AMS has been capped at £6.2 million.

The vendor, James Herbert, will remain with AMS as Managing Director. AMS will become the second subsidiary of Umeco's Repair & Overhaul division and Mr Herbert will report to John Smith who heads the division.

Clive Snowdon, Chief Executive of Umeco, commented: "AMS represents a very attractive strategic addition to our Repair and Overhaul division. It is a well managed business with a strong niche position in its market. AMS and AEM will work closely together in order to leverage their complementary capabilities and customers."