Acquisition

RNS Number:4565I
Electric Word PLC
26 November 2007





26 November 2007



                               Electric Word plc



                 ELECTRIC WORD RAISES STAKE IN MYCHILD TO 50.1%





Electric Word plc, the specialist information publisher, announced today the
acquisition of a second tranche of shares in MyChild Limited, raising its stake
from 10% to a majority 50.1%.



MyChild is highly complementary to Electric Word's education portfolio and
publishes a magazine aimed at supporting parents with their children's education
by helping them to understand both how schools work and what they can do at home
to support their children's development. Revenue is currently very largely
derived from approximately 18,000 magazine subscriptions, supplemented by
advertising and some commerce revenue from the sale of third-party products. In
the year to 31 May 2007 MyChild recorded a loss of #88,462 on turnover of
#706,528 (unaudited). Net assets at 31 May 2007 were #(624,615).



Electric Word subscribed #137,500 in cash for new shares in August 2007 to
acquire a 10% equity stake in MyChild and has now exercised its option to pay
#512,500 to acquire a shareholding of 40.1% from existing MyChild shareholders
to increase its shareholding to 50.1% and has agreed to lend a maximum of an
additional #400,000 to MyChild to enable it to repay existing shareholder loans.
Of the total second tranche investment of #912,500, payment of #400,000 has been
made now, with #512,500 being deferred to 31st May 2008.



This second tranche investment in MyChild will be funded by a loan of up to
#600,000 from Sussex Research Ltd, a related party of Electric Word. The loan,
which is unsecured, is due to be repaid by 31st May 2008 with interest payable
at a rate of 2.5% above the Bank of England base rate.



Electric Word has the option to acquire the remaining 49.9% of MyChild Ltd,
which would take its shareholding to 100%, at any time from 1st December 2008 to
1st March 2009 with the valuation fixed at a multiple of six times EBITDA for
the year to 30th November 2008, less an adjustment for movement in net assets,
and subject to an overall cap.



Sussex Research Ltd, through its subsidiary Sussex Trading Ltd, holds 23,036,364
ordinary shares in Electric Word, representing 16.18% of the total shares in
issue. In addition, Stuart Newton, who ultimately controls Sussex Research Ltd,
also personally holds 1,020,000 shares in Electric Word, representing 0.72% of
the total shares in issue.



As such, under the AIM Rules for Companies, Sussex Research Limited and Sussex
Trading Ltd are treated as a related party of Electric Word. The Directors of
Electric Word consider, having consulted with Panmure Gordon (Broking) Limited,
its nominated adviser, that the terms of the Sussex Research Ltd loan are fair
and reasonable insofar as its shareholders are concerned.



Julian Turner, Electric Word's Chief Executive, commented:

"Increasing our interest in MyChild to a majority holding, with the support of
our largest shareholder, is an important strategic move as we push further into
the parenting end of the education market - an area highly complementary to our
professional education publishing division. Education remains a driving issue
for parents as well as the Government. There is a significant opportunity to
support parents in the educational development of their children and MyChild
provides a good entry point for us in this market."



                                    - ends -


Julian Turner, Chief Executive
Electric Word                                         020 7954 3470

Tim Spratt / Helen Thomas
Financial Dynamics                                    020 7831 3113

Andrew Potts                                          020 7459 3600
Panmure Gordon



Further information:



In addition to the shares in Electric Word held by Sussex Trading Company Ltd
and Stuart Newton as described above, Sussex Trading Company Limited holds
#987,500 in convertible preference shares issued as part consideration for the
Company's acquisition of SportBusiness Group Ltd in January 2006. Electric Word
currently manages three education magazines published by Special Education
Publishing Limited (a company owned by Sussex Research Ltd), and has an option
to acquire Special Education Publishing Limited from Sussex Research Limited as
announced on 12 September 2007.








                      This information is provided by RNS
            The company news service from the London Stock Exchange
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