Costain Regulatory News (COST)

Costain Group PLC

("Costain" or "the Group" or "the Company")

Acquisition of ClerkMaxwell Limited

("ClerkMaxwell")

Costain, the international engineering and construction group, announces that it has today acquired 75% of the share capital of ClerkMaxwell, an Aberdeen-based front-end engineering and operations support services provider operating in the upstream oil & gas sector. In addition, the Group has simultaneously entered into a call option, which will provide Costain with the ability to acquire the remaining 25% of the share capital exercisable between 26 April and 31 May 2011.

Initial consideration, including the exercise cost of the call option (if exercised), will be £3.2 million for 100% of ClerkMaxwell's share capital. Deferred cash consideration payments, based on a percentage of the notional future value of ClerkMaxwell calculated on the basis of an 8.0x multiple of EBITDA ("Notional Future Value"), may also be payable shortly after completion of the financial years ending 31 December 2012, 2013 and 2014. The total percentage of Notional Future Value payable over the three years ending 31 December 2014 is 49%.

For the year ended 31 December 2010, ClerkMaxwell reported EBITDA and profit before tax of £0.4 million and £0.3 million, respectively, on revenues of £4.0 million. At 31 December 2010, ClerkMaxwell had gross assets of £1.1 million and is being acquired on a debt and cash free basis. The majority of ClerkMaxwell is being acquired from its senior management team and a private individual investor. The call option to acquire the remaining stake is between Costain and Meteor Investments.

ClerkMaxwell, all of whose senior management team* and workforce of 50 people will remain with the business, will be integrated into the Group's Energy & Process division providing Costain with a full hydrocarbons value chain capability from upstream oil & gas, gas processing, LNG, gas storage through to downstream. The transaction also provides both companies with access to a larger and broader customer base.

Commenting on the acquisition, Andrew Wyllie, Chief Executive of Costain, said:

"We are delighted to have acquired ClerkMaxwell. It is absolutely in-line with our strategy of broadening our existing front-end consultancy, project delivery and operations and maintenance offering through a combination of organic development and acquisitions. ClerkMaxwell is a fast growing business and will add complementary capabilities to our existing operations in the oil and gas sector, enhancing the full-service offering we can provide to our blue-chip customers."

John Wilson, Managing Director of ClerkMaxwell, said:

"Costain is the perfect home for ClerkMaxwell. We will bring additional skills and reach to an already strong oil and gas capability and Costain's established customer base will provide a major opportunity for us to realise our ambition of becoming a market-leading provider of value adding, front end engineering services."

7 April 2011

*see Notes to Editors

Notes to editors:

Costain (www.costain.com)

Costain is an international engineering, construction and maintenance group with a reputation for technical excellence founded on more than 140 years of experience. The Company's business segments are in Infrastructure (Highways, Rail, Nuclear and Airports), Environment (Water, Waste, Marine and Education), Energy & Process (Hydrocarbons & Chemicals, Nuclear Process and Power) and Land Development.

The Company is focused on market sectors where it expects there to be a significant investment driven by national needs.

It has worked on a number of significant infrastructure projects in the UK, including the St. Pancras railway station and the Channel Tunnel Rail Link and is currently working on a number of significant projects including the municipal waste treatment infrastructure for the Greater Manchester Waste Disposal Authority and Evaporator D at Sellafield, one of the largest nuclear projects in the UK.

ClerkMaxwell (www.clerkmaxwell.com)

ClerkMaxwell, delivers front-end engineering and operations support services to blue-chip customers in the upstream oil and gas sector including Chevron, BG Group, TAQA, GDF SUEZ, Talisman Energy and ConocoPhillips.

ClerkMaxwell's full breadth of services include feasibility and conceptual engineering, front end engineering, detailed engineering and operations support for projects in the upstream oil and gas sector including topsides, subsea and pipelines.

The senior management team of ClerkMaxwell, all of whom were shareholders in ClerkMaxwell prior to the transaction, will remain with the company and comprises: Alistair Dornan (Chairman), John Wilson (Managing Director), Satnam Shoker (Technical Director), Sean Close (Projects Director) and Guy Cook (Subsea & Pipelines Director).