Acquisition by Alliance Consulting Further Enhances Value of Key Safeguard Holding.

WAYNE, Pa. -- Safeguard Scientifics, Inc. (NYSE:SFE), which builds value in high-growth life sciences and information technology companies, today announced that its partner company, Alliance Consulting Group acquired Fusion Technologies, a provider of global delivery IT services. This strategic acquisition further enhances the value and long-term potential of Alliance Consulting, which is wholly-owned by Safeguard Scientifics.

Anthony Ibarguen, President and Chief Executive Officer of Alliance Consulting, stated, "We are very excited about the acquisition of Fusion Technologies. The acquisition significantly expands our ability to service customers via a global delivery model, in addition to bringing significant client relationships and skill sets in areas that are aligned with the company's strategic focus. In addition, Fusion Technologies brings significant domain expertise in early stage, rapidly growing market opportunities such as Service Oriented Architecture and open source development. These capabilities will enhance Alliance Consulting's value proposition across its entire customer base."

In April 2006, Alliance divested its Southwest Region in order to better align its opportunities with the company's strategic direction. The proceeds from this divestiture provided most of the funds for Alliance to acquire Fusion Technologies, with its U. S. headquarters (in Edison, New Jersey.) and extensive operations in Hyderabad and Bangalore, India. Fusion Technologies was at an approximately $15 million annual revenue run rate in the most recent quarter, and it has over 30 active clients primarily in the financial services and high technology industries.

The acquisition accelerates Alliance's strategy of delivering high-value, Information Management and Application Outsourcing services via a hybrid global delivery model. Approximately 80% of Fusion's 250 employees are based in India, more than doubling the size of Alliance Consulting's Indian operations.

Peter J. Boni, President and Chief Executive Officer of Safeguard Scientifics, added, "Alliance Consulting has significantly improved its operations and gained significant share in the IT services market over the past several quarters. We believe the acquisition of Fusion Technologies will further enhance Alliance Consulting's long-term growth and profitability profile, and is consistent with our strategy of putting capital to work in ways that will grow long-term value for the shareholders of Safeguard Scientifics."

Safeguard acquired Alliance Consulting in 2002, and has helped to refocus the company's go-to-market strategy, added senior management talent and helped to significantly improve the company's financial results.

About Safeguard Scientifics

Safeguard Scientifics, Inc. (NYSE:SFE) builds value in high-growth, revenue-stage information technology and life sciences businesses. Safeguard provides growth capital as well as a range of strategic, operational and management resources to our partner companies. Safeguard participates in expansion financings, corporate spin-outs, management buyouts, recapitalizations, industry consolidations and early-stage financings. For more information, please visit www.safeguard.com.

Forward-Looking and Cautionary Statements

Except for the historical information and discussions contained herein, statements contained in this release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements are subject to risks and uncertainties. These forward-looking statements that could cause actual results to differ materially, include, among others, managing rapidly changing technologies, limited access to capital, competition, the ability to attract and retain qualified employees, the ability to execute our strategy, the uncertainty of the future performance of our companies, acquisitions and dispositions of companies, the inability to manage growth, compliance with government regulations and legal liabilities, additional financing requirements, labor disputes, and the effect of economic conditions in the business sectors in which our companies operate, and other uncertainties described in the Company's filings with the Securities and Exchange Commission. Many of these factors are beyond our ability to predict or control. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. The Company does not assume any obligation to update any forward-looking statements or other information contained in this press release.