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1 October 2002

Smiths Group announced on the 1st of October 2002 that it has reached agreement with Rheinmetall Group of Germany to acquire its specialist X-ray business, Heimann Systems GmbH, for 235 million (Euros 375m) in cash. The acquisition will be funded from Smiths existing borrowing facilities and is subject to the approval of the relevant national regulatory authorities in Europe.

Heimann is the worlds market leader in X-ray security systems. The products are primarily used in transportation security for inspecting luggage and freight to detect explosives and other hazardous or illegal contents. The equipment is also used to inspect mail, and to detect metal or other foreign matter. Combining Heimann with Smiths trace detection technologies, which detect biological and chemical agents, explosives and narcotics, will give Smiths a unique ability to create integrated systems for the growing security market, worldwide. Another of Heimanns technologically advanced activities is biometric systems for the digital registration of fingerprints and palmprints, for law enforcement and civilian use.

Commenting on this significant expansion of its core Detection business, Smiths chief executive Keith Butler-Wheelhouse said: Heimann, our fourth Detection acquisition, makes Smiths a world leader in integrated security systems, and will substantially increase the size of our addressable markets in homeland defence and security, by broadening our customer, product and geographic base.

Heimanns turnover in the financial year ended 31 December 2001 was 104 million (Euros 167m), earning pre-tax profits of 14 million (Euros 21m). Heimann is showing strong growth and in the financial year to date, has increased sales by more than 50% over the previous year, driven by rapidly growing worldwide demand for enhanced security systems. The company has net assets of 19 million (Euros 30m), subject to final adjustment at completion.

Note to editors:
Smiths entered the detection market in 1997 with the acquisition of Graseby plc, which developed Ion Mobility Spectrometry technology, at its Watford (UK) facility, for the detection of chemical warfare agents. Its products are now used for both defence and civilian applications. Environmental Technologies Group Inc. (ETG), located in Baltimore, Maryland, was acquired by Smiths in 1999. ETG had established a leading position in the supply of hand-held nuclear, biological and chemical agent detectors for military forces and the public emergency services. A third business, Barringer Instruments, joined Smiths in 2001. With facilities in the US and Canada, it specialises in equipment to detect and identify trace amounts of explosives and illegal drugs. These three international businesses were combined earlier this year to create Smiths Detection.

Heimann Systems is based in Wiesbaden, near Frankfurt, with subsidiary businesses in the US, UK, France, Canada and Singapore. There is an established service and support organisation which will also benefit the international development of Smiths Detection. The company was founded in 1946 and was part of Siemens prior to its acquisition in 1993 by Rheinmetall, an international defence, electronics and automotive group. Of the 700 Heimann employees worldwide, around 450 are located in Germany.

The principal product areas for Heimann are X-ray systems which produce an image of the contents of luggage, freight or mail and are used for explosives detection, cargo inspection, and to identify product defects. As a world leader in explosive detection X-ray systems, Heimanns technology is complementary to Smiths trace detection products, providing the opportunity to supply complete integrated identification systems.

Through a comprehensive subsidiary and distribution network, Heimann has consistently achieved strong sales in all major world markets. Increased demand for airport security and counter-terrorism measures worldwide will fuel future growth.

An investor conference call with chief executive Keith Butler-Wheelhouse and financial director Alan Thomson will take place at 0915hrs UK time, Tuesday 1 October. To hear this broadcast call: + 44 (0)20 8781 0571. A recording of those proceedings will subsequently be available at


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