14th March 2007

Acquisition of Innovate IT Holdings BV for €10.25m

Strengthens offering with move into after sales service management

Kewill Systems plc (LSE: KWL) (“Kewill” or the “Group”), the leader in supply chain control solutions, announces the acquisition of Innovate IT Holding BV, a Dutch software company specializing in after sales service management, for an initial consideration of €8.25 million (£5.65 million) in cash and €2 million (£1.37 million) in shares.

Headquartered in the Netherlands, Innovate IT’s Service Logistics Solution (“SLS”) is used to manage the complex logistics and repair processes that exist in the after sales service supply chain to maximise service and minimise cost. Innovate IT has operations in Europe, North America and Asia-Pacific. Customers include OEM’s like HP, Palm, US Robotics and logistics service providers such as DHL, who handle the full logistics process on behalf of key clients.

In the financial year ended 31 December 2006, Innovate IT generated revenues of €6.8 million (£4.6 million), making an audited profit before tax of €305,000 (£206,000) after non-recurring management charges and had gross assets of €2.6 million (£1.8 million) at that date. At various dates in the 24 months following completion, up to €8.35 million (£5.7 million) will be payable in cash as deferred consideration subject to the attainment of performance criteria related to revenues and profits. Innovate IT‘s founders Niall Fitzgibbon and Arno van den Hoogen will remain as its joint Chief Operating Officers (COOs), reporting to Paul Nichols, CEO of Kewill Systems plc.

Kewill has consistently articulated a strategy focused on becoming the global leader in Supply Chain Control solutions. In addition to providing cross-selling opportunities, this acquisition accelerates the company’s goal of expanding its business into the often complex and critical requirements of after sales service and support, both locally and internationally. Kewill is now able to manage the complete supply chain including order placement, customer care, logistics, repair and exchange services, anywhere in the world.

In most cases Innovate IT host the SLS software on behalf of its customers and this Software as a Service (SaaS) business model is consistent with Kewill’s desire to offer its customers more flexible payment options such as monthly fees and transaction based pricing. This delivery method also increases the visibility of future earnings through a higher proportion of recurring revenue contracts.

Paul Nichols, CEO of Kewill, commented:
“With Innovate IT, we have found the ideal opportunity to extend our supply chain capabilities, expanding our solution footprint into a new and rapidly expanding market. This is the next step in being able to deliver a complete service to our clients in Supply Chain Control and opens up a number of cross-selling opportunities.”

For further information, please contact:

Kewill Systems plc
Paul Nichols, Chief Executive
Guy Millward, Finance Director
Tel: 020 8971 6774

Financial Dynamics
Juliet Clarke / Hannah Sloane / Edward Bridges
Tel: 020 7831 3113

About Kewill Systems Plc
Kewill Systems Plc. is a leading international company dedicated to the development and provision of software and services to manage complex business to business supply chains. With over 35 years' experience in the supply chain space, Kewill Systems is a long-time innovator of Supply Chain Execution software focusing on order management, transportation management, international trade logistics and visibility solutions for global trading communities.

Over 55,000 customers have trusted Kewill Systems Plc for the management of their supply chain information including household names such as UPS, FedEx, TNT, DHL, Frans Maas, Panalpina, A.N. Deringer, General Motors, Mazda, General Electric, Philips, Pratt & Whitney, Mitsubishi, Texas Instruments, Littlewoods, Sainsbury's, JD Williams, Marks & Spencer, Toys R Us and Legal & General.

About Innovate IT:
Innovate IT offers a comprehensive Service Management Solution built on more than 13 years experience in the industry. SLS provides users with extensive configurability and ease of integration ensuring the fastest implementation time for its customers to maximise their return on investment through reduced inventories, increased service levels, reduced lead times and improved management of warranty claims, returns and repairs and legislative requirements on discarding used parts.

With current staff strength of more than 30 employees in Europe, North America and the Asia-Pacific servicing a blue-chip customer base, through extensive domain expertise and dedication to customer service.