Serco

March 21, 2005 09:40 ET

Serco Completes Acquisition to Enhance US Market Position


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: SERCO

MARCH 21, 2005 - 09:40 ET

Serco Completes Acquisition to Enhance US Market
Position

HERNDON, Va.--(CCNMatthews - Mar 21, 2005) -

Serco Group plc ("Serco") today announces that, having obtained all
necessary regulatory approvals, it has completed the $215m purchase of
US-based RCI Holding Corporation ("RCI").

RCI is a leading supplier to the US Federal Government. This acquisition
significantly increases Serco's competitive position in the world's
largest service contracting market.

RCI's key services include IT services, systems engineering, strategic
consulting and HR-focused business process management. Its primary
market - the Department of Defense - represents the largest portion of
Federal spending, accounting for more than 75 per cent of total contract
amounts.

RCI brings enhanced technology capabilities to Serco North America. Its
strong customer relationships with the US Federal Government complement
Serco North America's predominantly state and local customer base. In
addition, RCI provides Serco with deep understanding of the various
contracting models used by US Federal authorities.

Serco will integrate RCI with its existing North American operations and
the enlarged business will have the critical mass to compete more
effectively with larger tier-one service providers in the US and
provides a strong platform to promote Serco's global capabilities. The
inclusion of RCI, with expected revenues in 2004 of $289m, more than
doubles Serco's North American turnover.

RCI was acquired for cash, on a debt free basis, and is expected to be
earnings accretive for Serco in 2005.

Serco Chief Executive Christopher Hyman said: "North America is one of
our chosen markets. Opportunities in the Federal market are substantial
for companies with proven capabilities and qualifications and the US
government intends to further increase the purchase of contracted
services. This acquisition will give us deeper and broader access and
will enable faster and more profitable growth."

Notes to editors:

Serco is one of the world's leading service companies. It helps national
and local governments and commercial clients around the world improve
their services by successfully managing organizational design and change.

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