Company : Press Release

Electrum to Benefit from £25m Investment in Key Client
EDINBURGH - October 9th, 2000

One of Scotland's leading Internet consultancies, Electrum, looks set to benefit from a £25m investment in its key client, Star Technology Group, which accounts for 50% of Electrum's turnover.

Star Technology, comprising Star Internet and MessageLabs, will use the new funds from US investment firms Madison Dearborn Partners and Catalyst Investors to expand in the UK and overseas. 'Electrum is a key technology partner for Star and this expansion will inevitably boost the volume of business we do with this client,' explained Stuart Harper, MD. 'We plan to double turnover this financial year to £1.6m and have a target of a £10m turnover in four years time. Our work with Star will be a key component of that growth.'

Star Internet, with over 1500 business customers, is one of the fastest growing ISP's in the UK, having built its success on an award-winning range of added-value services and a focus on the high growth market for small and medium sized (SME) enterprises. Netstar, Star's product to connect private networks to the Internet, is the most widely installed network connectivity solution in the UK with an installed base of over 900 businesses.

MessageLabs specialises in e-mail security services and, in partnership with some of the world's largest Service Providers, is building a worldwide infrastructure to deliver virus scanning, and a range of additional e-mail filtering services, at the Internet level.

MessageLabs already has over 200,000 users and received world-wide recognition as the only company in the world to protect all of its customers from the LoveBug, having stopped and named the virus ten hours before a fix was publicly available. MessageLabs cracked the LoveBug's 'DNA code' through its groundbreaking software, which can identify viruses using a knowledge base of techniques and behaviour.

The funds will allow Star Internet to extend its sales effort and infrastructure to meet the growing demands of the SME sector, both in the UK and other key European markets. In MessageLabs, substantial investment will be made in building the network infrastructure and increasing the sales and marketing effort on a global scale, to give the company the necessary coverage to reach the fast growing market for Internet level email filtering services. MessageLabs already has a presence in the UK, Germany and Benelux with plans to move into other key European markets and the US during the last quarter of this year.

One of Electrum's current projects for MessageLabs involves the development of a database driven extranet to enable remote management of Virus Towers that sit with clients using the virus scanning service. 'Such a facility will be key to the successful management of MessageLabs' international expansion,' commented Stuart Harper.

The extranet will not only enable MessageLabs staff to make repairs but will also enable self management by customers and resellers. It will provide comprehensive virus and e-mail statistics (who sent viruses, who they were sent to, etc) and allows services to be scaled up without significant increases in staff.

Star was founded by Ben White, Jos White and Rory Sweet in 1995. They formerly started RBR Networks, which became the world's largest distributor for Cisco Systems and was sold to Datatec in 1998.

'This investment will enable us to pursue our expansion plans both in the UK and internationally,' said Ben White, Chief Executive Officer at Star Technology Group. 'We are confident that Star Internet will continue to be a dominant force in the provision of Internet services to the SME sector in the UK and that MessageLabs will set the global standard for Internet level e-mail filtering services.'

The Star Technology Group currently employs 250 people and has offices in London, Gloucester, Manchester, and Cirencester.

Contacts:
Star Technology Group:
Jos White - Marketing Director
T - +44 1285 884407
E - jwhite@star.net.uk

Stephen Chandler - Finance Director
T - +44 1285 880041
E - schandler@star.net.uk

Electrum
Mark Rogers
Tel: 0131 555 4241
E-mail: Mark.Rogers@Electrum.co.uk