HCEG Healthcare Ent.

RNS Number:1225H
Healthcare Enterprise Group PLC
07 January 2005



                    Healthcare Enterprise Group PLC ("HCEG")

  Acquisition of minority interests and other transactions relating to SafaTec
                (UK) Limited - Related Party Disclosure


As part of a strategic review, the Board of HCEG has decided to buy out the
minority interests in SafaTec (UK) Limited ("SafaTec") so that it will hold 100%
of that company. Currently, HCEG owns approximately 60.7% of SafaTec. The Board
has also decided to re-align the related deferred consideration and earn-out
provisions set out in the agreement for the acquisition of the 60.7% of SafaTec
which completed in November 2003 to reflect the changing strategic priorities
within the group's product range so as to incentivise properly the original
inventors and vendors who now perform key roles within the group.  The Board's
wish to re-align these key employees' incentive arrangements is also predicated
by their view of the out-performance achieved by SafaTec's business from a
strategic and business development perspective since completion of the original
acquisition.


SafaTec is a holding company for interests in a number of early stage healthcare
companies which develop technology or products which may be introduced to the
market. SafaTec holds the majority of HCEG's interests in Ebiox, Optiscope and
other products and this acquisition of the minority stake in SafaTec allows HCEG
to hold those investments free of any minority interest. With the recent news
about Ebiox's acceptance by the NHS for further trials, and the signing of the
manufacturing agreement for Optiscope, the board of HCEG feel that shareholders'
interests are better served by owning 100% of Safa Tec. For the year ended 29
February 2004, SafaTec reported a loss before tax of #30,164 on net assets of
#19,931.


The minority shareholders in SafaTec have agreed to sell their minority
interests in that company for a consideration to be satisfied by the issue, in
aggregate, of 5,763,538 ordinary shares and the payment of #82,637 in cash.  As
part of the re-alignment of the deferred consideration set out in the
documentation relating to the original acquisition of the 60.7% interest, it has
been agreed to accelerate the part of the deferred consideration which has not
already been satisfied by HCEG.  The original vendors under the November 2003
acquisition, will receive 6,063,584 HCEG ordinary shares of 2.5 p each in
aggregate (assuming the share consolidation to be proposed at the extraordinary
general meeting of HCEG to be held on 10 January 2005 (the "Share 
Consolidation") is approved by shareholders) of which 3,441,083 HCEG shares 
will be issued to, or at the direction of Gordon Wood, the founder of SafaTec
and now COO of HCEG and 697,313  will be issued to Gordon Wood's family trust
(assuming the Share Consolidation is approved by shareholders).


In addition, HCEG will issue in aggregate 3,200,000 ordinary shares of 2.5 p
each (assuming the Share Consolidation is approved by shareholders) in
consideration for the original vendors under the November 2003 acquisition
waiving their right to receive any further sums linked to the sale of Optiscope
disposable endoscopes, as described in paragraph 12.1.12 of Part X of the
admission document issued by HCEG on 20 October 2003 (the "October 2003
Admission Document"). These ordinary shares will be issued to the selling
minority shareholders of SafaTec.


Gordon Wood has agreed that, subject to certain exceptions, he will not be
entitled to dispose of any ordinary shares of HCEG issued to him in relation to
the transaction described in this announcement for a period of 12 months
following their date of issue.  Gordon Wood and HCEG have also agreed to amend
his service contract (the terms of which were summarised in paragraph 7.3 of
Part X of the October 2003 Admission Document) so that it will have an
indefinite term with both parties being entitled to terminate by giving the
other not less than 12 months' prior written notice.


The above transactions are expected to complete on or about 13 January 2005 and
application for the admission to trading of the ordinary shares to be issued by
HCEG as described in this announcement will be made to AIM shortly thereafter.


SafaTec has agreed to acquire from SafaTec Limited, an Israeli incorporated
company controlled by Gordon Wood and Yechiel Lisner, 20,000 ordinary shares in
Optiscope Technologies Limited ("Optiscope") for a consideration of
approximately US$ 40,000.  This acquisition is expected to complete in early
February 2005 and will increase SafaTec's shareholding in Optiscope from
approximately 45% to approximately 58% on a fully diluted basis.  HCEG has also
decided to invest a further US$ 100,000 in Optiscope, which will increase
SafaTec's aggregate percentage shareholding to approximately 64% on a fully
diluted basis.


The directors of HCEG, excluding Gordon Wood, having consulted with Numis
Securities Ltd, the company's NOMAD and broker, consider the terms of the
transactions detailed above are fair and reasonable insofar as shareholders are
concerned.


Stuart Bruck, Chairman of Healthcare Enterprise Group PLC, commented:



"Acquiring the remaining shareholding in SafaTec to give HCEG 100%, provides the
logical next step towards integrating SafaTec's portfolio of products into
Healthcare Enterprise Group.  We look towards SafaTec to provide HCEG with an
increasing range of innovative product platforms each capable of generating
significant financial returns, the first two being Ebiox and Optiscope.



"We are in the process of evaluating several additional products capable of
meeting the Group's strict commercialisation requirements and hope to announce
further information in the coming months."

7 January 2005


Enquiries:

Healthcare Enterprise Group PLC                             020 7351 7500

Stuart Bruck - Executive Chairman

College Hill

Nicholas Nelson                                             020 7457 2020



                      This information is provided by RNS
            The company news service from the London Stock Exchange
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