ARINSO International (Euronext Brussels: ARIN), today announces it intends to join forces with Northgate Information Solutions PLC (LSE:NIS www.northgate-is.com). With a combined workforce of close to 6,000 professionals and revenues around EUR 700 million, the combination will consolidate its market leadership in HR & Payroll Services in Europe, with strong operations in the Americas & Asia Pacific.

On May 1st, Northgate signed a conditional agreement to purchase 9,069,840 ARINSO shares held by ARINSO's founder and CEO Jos Sluys, representing a 60.43% majority stake, at a purchase price per share of 18.75 EUR in cash plus 5 new Northgate shares. At the current exchange rate and share price (1), this amounts to 25.18 EUR per share, valuing ARINSO at approximately 375 million EUR.

The transaction has the support of both management teams and is subject only to approval by the Shareholders of Northgate. The Board of Directors of Northgate unanimously advises its Shareholders to approve the deal. Target date for completion of this transaction is August 1st, 2007, upon which Northgate acquires control of ARINSO International. Subsequently Northgate will launch a mandatory public offer for all remaining shares according to the Belgian take-over regulation. The Board of Directors of ARINSO has expressed its support for the combination, subject to review of the takeover prospectus to be filed with the CBFA.

Both the strategic rationale and the timing for this combination are very clear. The HR services market is demonstrating accelerating growth, and both ARINSO and Northgate have enviable positions in their respective markets. Northgate is the market leader in HR & Payroll services in the UK using proprietary software solutions - whereas ARINSO is considered the prime supplier of SAP HR solutions across Europe, with a growing presence in the Americas and Asia Pacific. The dominant position of Northgate in the UK, Europe's most important HRO market, will considerably accelerate the roll-out of global contracts. Combining both companies will allow to target larger global HRO deals, optimally leveraging ARINSO's euHReka platform.
Both companies have an established off-shoring strategy, employing a combined 700 employees in India, Malaysia and the Philippines.

It is envisaged that Northgate's CEO, Chris Stone, will lead the combined companies. Jos Sluys, ARINSO's CEO, will become an Executive Board member of Northgate and will take up a leadership role in Europe with a focus on developing strategic accounts. He will also become the second largest shareholder of Northgate PLC. Given the highly complementary nature of both businesses, both management teams will remain in place and the combination will have a positive career impact on the employees of both companies.

Chris Stone, Northgate CEO: "This transaction represents a unique opportunity for Northgate and represents a step change in our growth and development. At a stroke it will transform our successful HR division into a world class business, with market-leading products that can serve the HR needs of corporate clients on five continents, from the largest multi-nationals to SMEs. Northgate and ARINSO are an excellent fit in terms of products, technologies, geographies and clients. I look forward to working with Jos and his colleagues to take full advantage of the opportunities that this presents us with."

Jos Sluys, ARINSO CEO: "We operate in a market where three elements really matter: references, technological edge and size. We already had a very strong reputation with leading employers, and have been recognized for our expertise in Human Capital Management with a focus on SAP HR & Payroll platforms. With Northgate we now have the opportunity to make a quantum leap in terms of market share and market coverage. The entire management team is confident that Northgate is the right partner at the right time."

Willy Breesch, Chairman of ARINSO International:"ARINSO's track record since 1994 has been impressive. Jos Sluys and his management team have grown the company from 5 people to more than 2,600, becoming the European market leader in HR Services. For the company, its employees, its customers and its shareholders the combination with Northgate makes great sense. The Board of ARINSO therefore endorses this move in the clear confidence that it will lay the foundation for the future growth of the new company".

ABN Amro and Allen & Overy acted as advisors to ARINSO and the seller.