Investment in trade partner

Xaar PLC 12 September 2005 FOR IMMEDIATE RELEASE 12 September 2005 Xaar plc STRATEGIC INVESTMENT IN INKJET INTEGRATOR, XENNIA Xaar plc ('Xaar'), the inkjet printing technology group headquartered in Cambridge, has made a strategic investment in Xennia Technology Limited ('Xennia'), the inkjet solutions house based in Royston, UK. Xennia has used Xaar's technology for some years. More recently, the two companies have been working closely together on new developments with a joint development agreement in effect since June 2004. In April 2005, Xennia became a preferred Xaar integrator partner. Xaar's investment will strengthen this relationship further at a time when inkjet is positioned to become a key production process for many industrial applications. Under the terms of the agreement, Xaar has acquired a 10% holding in Xennia for £1.0m in cash and holds an option to purchase up to a further 2.5% at the same price. Currently, Xaar has no plans to increase its holding beyond that of a minority shareholder. Xennia was founded in 1996 by Dr Alan Hudd, President, and is a key provider of inkjet solutions for a wide range of industrial markets. It is an innovative developer of fluids and integrated systems for specialist inkjet applications and, in particular, offers unique decorative and functional UV cure inks and technologies for industrial processes, labelling, packaging and product decoration onto non-porous substrates. Nigel Berry, Finance Director of Xaar, commented: 'During the past year Xaar has been developing a network of integration partners to help spearhead its drive into new applications and new markets. Xennia has substantial experience of applying inkjet to many different industrial applications and has created a number of pioneering ink technologies including groundbreaking metallic inks. Our investment in Xennia will cement an already strong relationship which we confidently expect will contribute toward Xaar's future growth.' Commenting for Xennia, Nick Balon, VP and General Manager, said: 'The level of ink and head synergy required for successful inkjet integration demands very close collaboration between inkjet developers. Xaar is recognised as a leading supplier of high performance printheads and offers a world class range specifically developed to meet the demands of industrial applications. For Xennia, the relationship with Xaar strengthens our ability to offer our customers a fully supported inkjet proposition and we see it as key to helping sustain our growth.' Contacts Xaar plc: 01223-423663 Ian Dinwoodie, Chief Executive www.xaar.co.uk Nigel Berry, Group Finance Director & Deputy Chief Executive Xennia Technology: 01763-246600 Nick Balon, Vice President www.xennia.com Bankside Consultants: Steve Liebmann or Susan Scott 020-7367-8883 / 07802-888159 This information is provided by RNS The company news service from the London Stock Exchange