ILA Ila Group

TIDMILA

RNS Number : 0130D

Ila Group Limited

16 March 2011

ILA GROUP LIMITED

("Ila" or the "Company")

Acquisition of Premium Factory

Gordon Black appointed as advisor

-- Completion of 100% acquisition of blue chip promotional manufacturer, Premium Factory Ltd, giving ILA:

o Access to new retailers, countries and product opportunities, both domestic and international

o Additional design, sourcing and marketing capabilities

o Cost saving opportunities following integration

-- Appointment of Gordon Black (former Chairman of Peter Black Holdings) as corporate advisor

-- Tax rebate of GBP233,290

-- Cancellation of 220,307,377 Contingent Consideration Shares

ILA Group, the AIM listed retail marketing specialist is pleased to announce the acquisition of 100% of the issued share capital of Premium Factory Ltd.

Premium Factory develops and manufactures promotional items for fast moving consumer goods (FMCG) manufacturers such as Nestle and Unilever. In addition it has developed a range of children's products and a pipeline of new products. Premium Factory currently sells these ranges through major retailers, such as Asda and Sainsbury's. It has also recently acquired a global supplier agreement with Walmart and received the rights to make various products under major licenses such as Toy Story and Marvel.

The most recent published accounts for the year ended 31 January 2010 show turnover of GBP2.6m and a pre-tax loss of GBP120k. The current balance sheet shows a deficit on shareholder funds of GBP650k.

ILA has purchased 100% of the issued share capital of Premium Factory for GBP100. In addition, ILA has made a loan of GBP400,000 to provide additional working capital to support the company's growth and development.

The Directors of ILA see significant benefits from the acquisition:

1. Cross-selling and marketing opportunities between the two.

2. An immediate increase in design, sourcing and manufacturing capabilities within ILA through Premium Factory's existing fulfilment operations.

3. Licence deals recently agreed.

4. A reduction in the cost base

Appointment of Gordon Black: ILA is also pleased to announce the appointment of Gordon Black CBE as a corporate advisor. He will work with the Directors in growing the company, both organically and through helping to identify future acquisitions. As the Chairman of Peter Black Holdings, Gordon grew the LSE listed company into a leading supplier of FMCG goods to, amongst others, M&S. He led a GBP223m MBO of the company prior to successfully selling to Li & Fung Holdings three years later. Gordon brings considerable experience and expertise to ILA, which will be invaluable as ILA enters this next phase of growth.

In addition, ILA received GBP233,290 in September 2010 in respect of Research and Development tax rebates due to its subsidiary Molectra Australia Pty Limited ("Molectra"). As a result it will be cancelling 220,307,377 of the Contingent Consideration Shares. The independent Directors of the Company are satisfied that no further rebates will be forthcoming to Molectra and therefore the remaining 154,400,846 Contingent Consideration Shares will be issued to the qualifying shareholders of ILA Security Ltd. as they appeared on the shareholder register on 5(th) March 2010.

Simon McGivern CEO of ILA Group commented: "The deal with Premium Factory is ILA's first acquisition carried out post flotation and opens up many new markets for us. The acquisition will accelerate ILA's revenue generation, increases our production capacity through additional suppliers and broadens our retail presence. The Premium Factory deal compliments our strong organic growth and following its integration, we will continue to look for similar strategic opportunities to grow the company.

We are also delighted to welcome Gordon Black as an advisor to Ila. Gordon has an impeccable pedigree in the industry and his support is a huge boost to Ila's standing within the marketplace."

16th March 2011

For further information, please see www.ilasecurity.com or contact:

Ila Group Limited 020 7501 1050

Simon McGivern, Chief Executive Officer

Paul Gazzard, Chief Operating Officer

finnCap 020 7600 1658

Charles Cunningham - corporate finance

Joanna Weaving - corporate broking

Lothbury Financial Services 020 7868 2010

Gary Middleton

Simon Astley

This information is provided by RNS

The company news service from the London Stock Exchange

END

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