RNS Number:3231E

InterQuest Group PLC

09 June 2006

InterQuest acquires specialist public sector IT recruitment business

InterQuest Group Plc ("Interquest" or "the Group"), the IT recruitment specialist, today announces the acquisition of Sand Resources Limited ("Sand")for a consideration of up to £5.2m in cash and shares and the appointment of David Seear, M.D. of Sand, to the Group's Operational Management Board.

The initial consideration comprises £1.39m in cash and £0.36m in new InterQuest shares issued at 50 pence. There is a maximum further consideration of £2.95m, payable as to 73.75% in cash and 26.25% in InterQuest shares provided that certain financial targets are achieved in the year to 31 May 2007. In addition, further amounts of £0.3m and £0.2m are payable as to 50% in cash and 50% in InterQuest shares provided that increased financial targets are achieved in year

two and year three.

Sand is a specialist provider of IT recruitment services to the public sector and in February this year was one of only thirteen companies awarded Catalist accreditation by the Office of Government Commerce (OGC) to supply IT contractors to public sector organisations.

In the year to 31 May 2005, Sand generated turnover of £6.16m and audited adjusted profit before tax of £323,000. Net assets were £213,000 at 31 May 2005.

The Board believes that the acquisition, its third in twelve months, represents another significant milestone in the Group's development into one of the UK's leading providers of specialist IT recruitment services.

Application has been made to the London Stock Exchange for 411,424 new ordinary shares in InterQuest Group Plc to be admitted to trading on AIM by 16 June 2006. The consideration shares will, upon issue, rank pari passu with the Group's existing issued ordinary shares and are subject to a lock in restriction, which expires on 9 June 2007, and an orderly market provision for twelve months thereafter.

Gary Ashworth, Chairman of InterQuest, said:

"We are pleased to welcome this high quality, well run, niche business to the InterQuest Group. We believe that the inclusion of Sand Resources in our Group broadens our presence in the Central Government IT staffing arena and provides a strong platform for growth."

For further information please contact:

Gary Ashworth, InterQuest Group Tel: 020 7025 0100

Ross Eades

Michael Joyce

Nick Fox, M:Communications Tel: 020 7153 1530

Eleanor Williamson

Notes to Editors:

InterQuest Group is a recruitment business specialising in the provision of IT contractors, permanent staff and executive search and selection. InterQuest listed on AIM in May 2005.

The Group has grown principally by acquisition having bought six businesses, which together provide IT staffing services to a range of blue chip clients, and currently employ 110 people.

Gary Ashworth, Chairman, founded the Group in October 2001 with the aim of developing a group of multi-branded IT staffing businesses, each focused on a specific niche area of the UK IT staffing market. In August 2003 Ross Eades joined as Chief Executive, forming an experienced management team with a proven ability to integrate acquisitions and run larger businesses and a track record

of creating shareholder value in the sector.

InterQuest is managed as a group of independently branded divisions, each with a different market or candidate skill set focus. Each division operates on a day-to-day basis with a large degree of autonomy whilst benefiting from the key central services of the group such as accounting, legal and IT support, as well as Group wide sales and management training programmes.

The Group currently consists of six operating divisions and an online database:

PeopleCo: Focused on SAP, software development and software testing with major clients including Accenture, Norwich Union, Cadbury Schweppes and Betfair.

Genesis: Focused on financial institutions in the City of London. Its client base includes Fidelity Investment, Nomura International plc, Credit Suisse First Boston, and Hudson Global Resources Limited.

Insight: Focused on IT infrastructure and voice and data communications rather than a particular industry group. This is reflected by its client base, which is made up of businesses in a variety of sectors, including Pfizer, Dixons, Citibank and Swiss Re Health & Life Limited.

InterQuest (UK): Focused on the retail sector, in particular fast moving consumer goods businesses. Its clients include John Lewis plc, Screwfix Direct, Helphire Group plc and Play.com. The Group took on the InterQuest name in 2002.

SBS: Focused on the public sector, in particular, central and local government offices. Its clients include the Office of the Deputy Prime Minister, FSA, and the London Borough of Camden.

FJB: Focused on the public sector, in particular the NHS and City based financial institutions.

ITmail: An online candidate database search service used by all of InterQuest's divisions. This database consists of approximately 300,000 CVs and is an additional support tool for all the Group's recruitment consultants.

The Group's turnover for the year ended 31 December 2005 was £27.6m with profit before tax of £1.37m.

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