Disposal of The School Run (0549B)

TIDMELE

RNS Number : 0549B

Electric Word PLC

10 April 2012

Electric Word plc ("Electric Word")

Electric Word is pleased to announce the disposal of the business and assets of The School Run (www.theschoolrun.com), the website that supports parents with their children's education, to Jade Creative Ltd ("Jade") (the "Disposal"). Jade is owned by Dani Zur, who previously managed the Specialist Consumer division at Electric Word before the reorganisation of Electric Word into the Education, Health and Sport & Gaming divisions announced in February 2012. The Education division will now focus on its professional development products for teachers and schools.

The School Run, which was loss-making in 2010 and 2011, has been acquired by Jade for an upfront consideration of GBP1, plus stock of GBP2k. In addition, Electric Word and Jade have entered into a licensing arrangement where Electric Word will receive a royalty that will increase from an initial 6% of turnover to 8% (The School Run turnover in 2011 was GBP329k). Electric Word will also retain an interest in the value of Jade in the event of a future disposal. The disposal of The School Run is not expected to affect current year earnings.

Julian Turner, Electric Word Chief Executive, commented: "We continue to believe that the parents' market has real potential but the scale and the opportunity we see in the professional side of the education market has led us to focus our efforts there; we wish the School Run every success in its new home where it will get the focused attention of a dedicated team."

ENDS

Enquiries:

 
 Electric Word 
 Julian Turner, Chief 
  Executive                020 7954 3470 
 
 Panmure Gordon 
 Andrew Potts              020 7459 3600 
 
 FTI Consulting 
 Charles Palmer / Clare 
  Thomas                   020 7831 3113

Additional Information:

Under the Disposal, Electric Word and Jade have entered into a royalty agreement for Jade's of The School Run name. Electric Word will receive a revenue based royalty starting at 6% of turnover in the first year, increasing to 8% of turnover in the third year. The royalty is for a maximum period of 10 years and subject to an overall cap of GBP2m.

In addition, as part of the Disposal, Electric Word has been issued the following at nominal value (GBP1):

-- Non-voting B shares in Jade which gives Electric Word the option to sell the B shares at the same price as the existing A shares in the event of a future disposal.

-- An option to buy back The School Run after 10 years at the greater of GBP1.5m or 65% of turnover.

The gross assets of The School Run at 30 November 2011 were GBP140k, and losses before tax for the year ended 30 November 2011 were GBP2,613k, which includes a trading loss of GBP167k (before amortisation and impairment of goodwill, allocation of central PLC costs and write off of intercompany debt).

This information is provided by RNS

The company news service from the London Stock Exchange

END

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