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26 November 2010

Digital Barriers plc

Proposed Placing to raise £30m (before expenses)

Digital Barriers plc ("Digital Barriers" or the "Company"), the specialist provider of products and services to the homeland security and specialist defence markets, is pleased to announce a conditional placing of 18,750,000 new Ordinary Shares at 160 pence per share to raise £30 million (before expenses) for the Company to further implement its stated strategy.

Background to and reasons for the Placing

The Directors believe that the homeland security and specialist defence markets continue to represent a compelling commercial opportunity and, accordingly, they intend to continue to further develop Digital Barriers through strategic acquisitions and ongoing organic growth. The Company's focus is to provide the digital security and surveillance technology needed to enhance the physical and electronic security of high-profile, high-value potential targets, and to provide advanced technology to support military operations, particularly in the areas of counter-insurgency and force protection.

Digital Barriers will seek to make further strategic acquisitions to secure technologies and capabilities that fall within its areas of focus. In parallel, Digital Barriers will continue the integration of its acquisitions and will continue to develop its UK and Singapore locations, and seek to establish the demand for the Company's services and capabilities in the US and Middle East.

The purpose of the Placing is to raise funds to be used by the Company to further implement its stated strategy. In particular, the Directors intend to use the net Placing proceeds to finance further strategic acquisitions.

The Placing

General

The Company has conditionally raised £30.0 million (before expenses) through the proposed issue of the Placing Shares at the Placing Price, which represents a discount of approximately 20.6 per cent. to the closing middle market price of 201.5 pence per existing Ordinary Share on 25 November 2010, being the last practicable date prior to this announcement. The Company's Issued Share Capital is 24,782,500 shares. Accordingly, the 18,750,000 Placing Shares will represent approximately 43.1 per cent. of the Enlarged Issued Share Capital of 43,532,500 Ordinary Shares. The net proceeds of the Placing are expected to be approximately £29.0 million.

The Placing Agreement

Pursuant to the terms of the Placing Agreement, Investec, as agent for the Company, has conditionally agreed to use its reasonable endeavours to procure subscribers for the Placing Shares. Investec has conditionally placed the Placing Shares with certain existing and new institutional and other investors at the Placing Price. The Placing has been fully underwritten by Investec subject to the terms of the Placing Agreement.

General Meeting and Admission

The Placing Agreement is conditional upon, inter alia, the Resolutions being duly passed at the General Meeting to be held at the offices of Osborne Clarke, One London Wall, London EC2Y 5EB at 10.00 a.m. on 13 December 2010 and Admission becoming effective on or before 8.00 a.m. on 14 December 2010 (or such later time and/or date as the Company and Investec may agree, but in any event by no later than 8.00 a.m. on 31 December 2010).

The Placing Agreement contains warranties from the Company in favour of Investec in relation to, inter alia, the accuracy of the information in the Circular and other matters relating to the Company and its business. In addition, the Company has agreed to indemnify Investec in relation to certain liabilities it may incur in respect of the Placing. Investec has the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event of a material breach of the warranties given to Investec in the Placing Agreement, the failure of the Company to comply in any material respect with any of its obligations under the Placing Agreement, the occurrence of a force majeure event or a material adverse change affecting the condition, or the earnings or business affairs or prospects of the Group as a whole, whether or not arising in the ordinary course of business.

Settlement and dealings

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will occur on 14 December 2010. Immediately following Admission, the Company will have 43,532,500 Ordinary Shares in issue.

The Placing Shares will, when issued, rank in full for all dividends and other distributions declared, made or paid on the Ordinary Shares following Admission and otherwise pari passu in all respects with the existing Ordinary Shares.

The Circular

The Company will later today publish a Circular containing, inter alia, further details of the Placing and a notice convening the General Meeting at which the Resolutions will be proposed. The Circular will be available at www.digitalbarriers.com.

Trading Update

Digital Barriers announced its unaudited interim results for the seven months ended 30 September 2010 on 16 November 2010. Trading since the end of the seven month period to 30 September 2010 has been in line with management expectations.

Tom Black, Executive Chairman, commented:

"We have been delighted with the level of support our shareholders have continued to show to the Company through this Placing. We remain excited about the opportunities ahead of us to continue to deliver on our strategy to become a leading provider of specialist products and services to the homeland security and specialist defence markets."

Enquiries:

Investec Investment Banking, a division of Investec Bank plc, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for the Company in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Investec or for providing advice in relation to the Proposals or any other matter in relation to the contents of this announcement.

This announcement has been issued by Digital Barriers plc and is the sole responsibility of the Company. This announcement has not been approved by Investec for the purposes of section 21 of FSMA. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Investec or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities or any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, such securities by any person in any circumstances, and in any jurisdiction, in which such offer or solicitation is unlawful. Accordingly, copies of this announcement are not being and must not be mailed or otherwise distributed or sent in or into or from the United States, Canada, Australia, Japan, the Republic of South Africa or the Republic of Ireland or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction (each a "Restricted Jurisdiction") or to, or for the account or benefit of, any United States, Canadian, Australian, Japanese, South African or Irish person and any person receiving this announcement (including, without limitation, custodians, nominees and trustees) must not distribute or send it in or into or from a Restricted Jurisdiction.

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the Directors' current intentions, beliefs or expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the Company's markets. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual results and developments could differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this announcement are based on certain factors and assumptions, including the Directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity. Whilst the Directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect. Save as required by law or by the AIM Rules, the Company undertakes no obligation to publicly release the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Directors' expectations or to reflect events or circumstances after the date of this announcement.

Expressions used in this announcement shall have the meanings set out in the Appendix to this announcement.

Appendix

 DEFINITIONS

In this announcement, the following expressions have the following meanings, unless the context requires otherwise: