US

IP Group subscribes for shares in COE Group Placing

01 Aug 2006

IP Group plc (code: IPO), the intellectual property commercialisation company, is pleased to announce that it is investing £500,000 by subscribing for 6,250,000 new ordinary shares in COE Group plc ("COE") as part of a placing of 11,875,000 ordinary shares at eight pence per share announced by COE today ("the Placing").

The Placing will raise £950,000 (before expenses) for COE. The Placing represents a discount of 38.5% to the closing mid-market price of COE of 13 pence on 31 July 2006. Following the Placing, and subject to COE shareholders approving the whitewash of IP Group and Richard Farleigh (two of the placees) on 24 August 2006, IP Group and Richard Farleigh will own 61.0% of COE's enlarged share capital. Richard Farleigh is one of IP Group's key business angels who has backed over 50 early stage technology companies including Wolfson Microelectronics plc, ARC International plc, Amino Technologies plc, ANT plc, Celoxica Holdings plc, Oxonica plc and Clearspeed Technology plc.

With a 16 year track record of innovation in video surveillance, COE has developed a portfolio of rugged products for camera control, video transmission, scene analysis, operator display and recording which interface with most major third party systems. These systems are designed to work reliably in extreme environments for many years. The company also provides services including system design, on-site test, commissioning and long-term maintenance. COE sells through regional and global systems integrators such as Siemens, Alcatel and Singapore Technologies, and through an extensive network of Value Added Resellers.

At 30 June 2005, the value of COE’s gross assets (net of deposits and loan notes) were £3.6 million and the losses attributable to those assets in the year ended 30 June 2005 were £1.0 million. The Directors of IP Group believe that the digital surveillance market is a growth industry and that this transaction will benefit IP Group's partners by offering complementary technologies an alternative route to market while simultaneously offering synergies with certain IP Group technologies and portfolio companies. IP Group and Richard Farleigh have confirmed that, following Admission, they intend that the business of COE will continue in substantially the same form as it does currently.

However, both parties believe that they will be able to assist COE to exploit synergies which have been identified between COE and companies within the IP Group portfolio, to pursue a strategy of organic profit growth through existing sales channels as well as strengthen the range of products through appropriate corporate acquisitions.

Alan Aubrey, Chief Executive of IP Group, said: "This is the first time in IP Group’s history that it has made a direct investment into another quoted company, and it is consistent with our strategy of investing in interesting technology companies where we see excellent opportunities and significant market growth. We are extremely excited by the growth prospects for COE and are particularly impressed with its international reputation for complex video surveillance systems in demanding environments – something that has potential operational and financial synergies with certain companies and technologies within the IP Group portfolio. COE's management has made excellent progress in the last few years and we are very much looking forward to working with them.

Andrew Wallace, Chief Executive of COE Group, said: "We are delighted that IP Group sees the potential growth in COE. This transaction is a major endorsement of COE's technology and its prospects while providing important financing for COE to fund expansion and further exploit our products. IP Group's extensive portfolio of core technologies, several of which have applications in the surveillance and counter-terrorism markets, provides COE with excellent technology sources for addressing customers' needs. We also plan to use IP Group's extensive resources to help COE become a consolidator in the swiftly evolving surveillance and security markets.

For further information about IP Group plc, please contact:

IP Group plc 020 7489 5200
Magnus Goodlad (Executive Director)  
Liz Vaughan-Adams (communications)

020 74895206/07979 853802

Buchanan Communications 020 7466 5000
Mark Court, Tim Anderson, Mary-Jane Johnson  
COE Group  
Andrew Wallace 0113 230 8800

Notes for Editors

About IP Group
IP Group Plc is an intellectual property (IP) commercialisation company that specialises in commercialising university technology. Founded in 2001, IP Group listed on AiM in October 2003 and moved to the Official List in June 2006. It has made two acquisitions to date : Techtran, a company set up to commercialise university intellectual property under a long term contract with the University of Leeds, in 2005 and Top Technology Ventures, an investment adviser to early stage technology venture capital funds, in 2004. The group has formed long-term partnerships with eight universities: the University of Oxford, King’s College London, CNAP/University of York, the University of Leeds, the University of Bristol, the University of Surrey, the University of Southampton and Queen Mary, University of London. As at 13 June 2006, 42 spin-out companies had been created among the group's university partners. Of those, seven have listed on the AiM market of the London Stock Exchange and there has been one trade sale.

For more information, please visit our website at www.ipgroupplc.com

About COE

COE is a leading developer and exporter of advanced video surveillance (CCTV) systems with a global installed base of large safety-critical systems, many in extreme environments. COE focuses on three sectors: traffic & transport, city-centre surveillance and industrial complexes. Traffic and transport references include the London Congestion Charge, the underground rail systems in France, Singapore, Hong Kong & Delhi, high-speed rail systems in Spain, Germany and the UK, airports across Germany, Hong Kong and SE Asia and road systems worldwide. City-centre systems include over 35 UK towns and cities while industrial complexes include the South Pars gas field in the Middle East.

www.coe.co.uk