CER Group $5 Million Australian Acquisition

3 September 2007

CER GROUP COMPLETES $5 MILLION
AUSTRALIAN ACQUISITION

CER Group has completed the purchase of Australian sustainable environmental management company Vital Resource Management (VRM) for $5 million.

The purchase price will be met through an initial cash payment of A$750,000 and the issue of some 18 million ordinary CER Group shares at an issue price of 10 cents a share, together with deferred cash and share elements.

Managing Director of CER Group David Warrick said the acquisition of VRM will add a third core business stream to CER, based around specialist biological management products which treat soil and water.

VRM has committed forward orders of A$4.5 million, which includes significant contracts with Queensland sugar cane growers, who are under increasing regulatory pressure to protect the Great Barrier Reef by reducing nutrient run-off into waterways that flow into the sea, said Mr Warrick.

“We are confident the acquisition will add $1 million to our EBIT over the next 12 months.”

He said the acquisition was consistent with CER’s philosophy of investing in proven businesses that will provide capital growth and have at their core natural products that contribute to environmental sustainability.

“VRM is a long established and successful Australian business with excellent growth potential in both Australia and New Zealand, as well as internationally.”

“Through the use of VRM’s microbial products, Queensland sugar cane growers are achieving the same production output while reducing their fertiliser inputs by as much as 50%, and in the process supporting the Australian Environmental Protection Agency’s initiatives to protect the Great Barrier Reef from environmental damage.

“Given New Zealand agriculture is facing similar challenges as it wrestles with reducing nutrient run off into waterways and greenhouse gas emissions caused by the intensification of dairying, we see a ready market for its product range in New Zealand.”

VRM’s operations will continue to be based in Queensland, and will operate under the existing successful management team led by Managing Director, Ken Bellamy.

VRM holds a variety of international patents and regulatory consents relating to microbial products.

ENDS

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