DawMed Systems PLC 30 January 2006 30 JANUARY 2006 DAWMED SYSTEMS PLC ("Dawmed" or "the Company") SALE OF CERTAIN ASSETS OF 'SSD' PRODUCTS TO BMM WESTON LIMITED The Board of Dawmed, the AIM listed medical devices company which designs, manufactures, sells and services washer-disinfector-dryers ("WDD") used by NHS Trust hospitals, private hospitals and clinics, is pleased to announce an Agreement for the sale of certain intangible assets, viz. the relevant intellectual property, know how and computer systems relating only to the products in the Company's Sterile Services Departments ("SSD") range, to BMM Weston Limited ("BMMW"). Under the terms of this Agreement Dawmed will continue to provide full testing, servicing, supply of spare parts and training to all of its existing SSD customers (including to those existing SSD customers to be supplied by BMMW in the future) for the full life span of their machines and BMMW will manufacture and sell the SSD range of WDDs henceforth. As foreshadowed in the 2005 Interim and Year End Reports and Accounts, after some twelve months monitoring and evaluating the market trends, it has become clear that the NHS preference for the 'One Stop Shop' decontamination package combining large washer-disinfector-dryers with large sterilisers in the SSDs ("Sterile Service Departments") of hospitals, which is dominated by multinational companies, will continue. This trend, combined with the high working capital requirements and low margins for SME companies like DawMed offering separate products in that fiercely competitive SSD field, has convinced the Board that shareholders' interests will be better served by the vigorous and exclusive exploitation of the higher margin products in the Company's portfolio which, together with its Support Services Operation, constitute the main drivers of organic growth for the Company. The Agreement, which provides for, inter alia, a consideration of £100,000 gross against a book value of the relevant assets of circa. £24,000 and the purchase of available stock at BMMW's discretion, is considered by both parties as a logical and mutually beneficial step which enables a One Stop Shop service to be created from the two previously separate product lines. For DawMed, the beneficial effects of the Agreement will be the elimination of net losses attributable to the SSD products, the release of working capital previously required by the SSD products and the application of the proceeds from the sale as further general working capital. This will enable the Company to fully concentrate its efforts on the more rewarding and recently expanded range of existing and new products for the Primary and Secondary Healthcare markets in the UK, Europe and worldwide, viz: • "Clinic" bench top WDD - providing thermal disinfection for use in all NHS and private dentists, clinics and other primary healthcare practitioners and also targeting the European and worldwide markets; • "AERclens" bench top flexible nasendoscope washer-disinfector - a completely new product providing chemical disinfection for use in all NHS and private Ear, Nose & Throat ("ENT") Departments, clinics and consulting rooms and also targeting the European and worldwide markets; • New Wassenburg "pass-through" flexible endoscope washer-disinfector ("WD") and the continuation of the original Wassenburg space-saving flexible endoscope WD, both providing chemical disinfection for use in NHS and private Endoscopy Departments et al in the UK; and • New Wassenburg flexible endoscope drying/storage cabinets - providing a daytime and overnight sterile environment for use in NHS and private Endoscopy Departments et al in the UK. Kevin Gilmore, Executive Chairman, commented: "This Agreement is the highly satisfactory culmination of a long and arduous examination of what is best for the shareholders and stakeholders of the Company and the Board is confident of the beneficial effects that it will confer upon the Company for the immediate and long term foreseeable future". --ENDS-- Enquiries: DawMed Systems plc Tel: 01789 740010 Kevin Gilmore, Executive Chairman Beaumont Cornish Limited Tel: 020 7628 3396 Roland Cornish Bishopsgate Communications Limited Tel: 020 7430 1600 Maxine Barnes / Dominic Barretto For further information please visit DawMed's website at www.dawmed.com Note to Editors: BMM Weston Limited is a private company whose diverse interests include the manufacture and sale of SSD sterilisers and with whom DawMed has collaborated in the past to offer a 'One Stop Shop' service. However, it was without the success originally anticipated by both companies, mainly due to the inability to obtain the cost savings that will now be achievable by BMM Weston as a result of the Agreement, thus enabling it to compete with multinational manufacturers on a level playing field. This information is provided by RNS The company news service from the London Stock Exchange