GHH Gooch & Housego Plc

RNS Number:0658R
Gooch & Housego PLC
18 September 2000


                   Gooch & Housego PLC

 'Acquisition of a major supplier to the World Q-switch
                         market'
                            
Gooch  & Housego PLC ("G&H"), the specialist manufacturer
of   precision  optical  components  and  bespoke   glass
engineering items, acoustic-optic devices and instruments
for  measuring  optical radiation,  today  announces  the
acquisition  of  Neos Technologies  Inc  ("Neos")  and  a
Vendor Placing to raise #2.6 million.

Highlights

*  Acquisition  of Neos, a major Q-switch manufacturer
   based in the US, for $6.4 million.

*  Unaudited management accounts for Neos for the year
   to 31 July 2000 show sales of $6.1 million and pre-tax
   profits of $1.35m.

*  Acquisition will considerably strength G&H's
   position in the Word Q-switch market as well as improving
   G&H's access to the US market for existing products
   range.

*  Vendor Placing of 1,095,000 new Gooch & Housego
   shares at 240p to raise #2.6m.

*  Placing of 300,000 Directors' shares.

*  Current trading in line with expectations.


Archie Gooch, Chairman and Founder of G&H said

"We  are  delighted  to  have made  this  strategically
important   acquisition.    Neos'   product   range    is
complementary with our own and I am particularly  pleased
that  we  have  acquired the patent for  Neos'  Q-switch,
which  contains crystal quartz, for use in  diode  pumped
systems.  There is a new and growing demand for this type
of switch".



For further information please contact:

Gooch & Housego                           01460 52271
Archie Gooch, Executive Chairman
Ian Bayer, Finance Director
Buchanan Communications                 020 7466 5000
Tim Thompson


The  Board of Gooch & Housego is pleased to announce  the
acquisition of Neos for $6.4million.  The acquisition  is
being  financed  by  #1.9m  in  cash  and  the  issue  of
1,095,000  new G&H ordinary shares to the  Vendors.   The
Vendors  interests have today been placed by Charterhouse
Securities  at 240p per share.  On completion,  G&H  will
acquire  96.13  per cent of Neos' issued  share  capital.
The  Minority Interests will be purchased or compulsorily
acquired in accordance with the laws of Florida  and  G&H
therefore  expects to own 100 per cent. of  Neos  by,  at
latest, 31 December 2000.

Neos was founded in 1982 and is based in Florida with  46
employees. It manufactures Q-switches and other  acousto-
optic devices and together with G&H is the major supplier
to  the  world Q-switch market. The unaudited  Management
Accounts  for Neos for the year ended 31 July  2000  show
sales  of $6.1m and pre-tax profits of $1.35m. Under  the
terms of the acquisition agreement G&H will pay $6.4m  on
completion less the amount due to the Minority  Interests
of  which  $1.9m  will  be held in  escrow;  #1.4m  until
completion of the audited accounts for the year ended  31
July  2000,  and  $0.5m  until 30  November  2001.If  the
audited  profits for the year to July 2000 fall short  of
$1.35m,  the consideration will be reduced by  5.5  times
the  amount  of  any such shortfall.   The  Vendors  have
warranted net assets of not less than $3.0m as at 31 July
2000.

In  the  year to July 1999 Neos suffered similar problems
to   those   experienced  by  G&H  caused   by   capacity
difficulties in the electronics industry in Japan and the
Far  East.  Sales  fell to $3.7m from  $4.7  achieved  in
1998.,  and  similarly pre-tax profits were reduced  from
$1m  to  $0.6m.  Since 1999 Neos has benefited  from  the
subsequent improvement in market conditions also  enjoyed
by G&H.

The   acquisition  will  considerably  strengthen   G&H's
position  in  the  World Q-switch market  and  will  also
improve  both  G&H's  access to the  US  market  for  its
existing  product  range  and Neos'  access  to  European
markets.   In  addition, there is scope  for  substantial
savings in the cost of manufacture as G&H will be able to
supply  almost all of the optical components, which  Neos
currently subcontracts.

The  principal  vendors of Neos are Ed Young,  President,
and  Bob  Belfatto, Vice-President.  They have agreed  to
remain   with  the  business  and  have  signed   service
contracts  for 1 year and 2 years respectively.   We  are
looking  forward to working with them to  strengthen  and
enlarge the combined business of the Group.

Concurrent  with  the  Vendor  placing,  three   of   the
Company's  Directors  have sold shares  which  have  been
placed  with Institutional Investors at a price  of  240p
per  ordinary  share. A.W.Gooch has sold  150,000  shares
reducing  his  holding to 1,516,008  shares  representing
8.42% of the enlarged issued share capital., Mrs.H.Virgin
has  sold 75,000 shares reducing her holding to 3,403,226
shares representing 18.9%,  and D.E.Irish has sold 75,000
shares   reducing   his   holding   to   998,206   shares
representing  5.55%. In addition, A.W.Gooch and  Mrs.  H.
Virgin  have  a non-beneficial interest in the  2,999,880
shares  held  by the Gooch / Virgin Discretionary  Trust,
and in 200,000 shares held by a charitable trust.

Since  G&H  reported its interim results  in  June  2000,
trading has continued to be in line with expectations  in
all  areas of the Group's business.   Within our  current
operations  the  G&H Ilminster business has  received  an
initial  order of #200,000 for crystal optical components
for  use  in Telecommunications systems in the  US.   The
customer has indicated that this is likely to be followed
by regular, more substantial orders.

Current   trading,   together  with   the   strategically
important   acquisition   of  Neos,   gives   the   Board
considerable  confidence in the future prospects  of  the
Group.

Application  has been made for the new G&H shares  to  be
admitted to dealing on the Alternative Investment Market.
Dealings are expected to commence on 21 September 2000.

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