PRESS RELEASE June 6th 2005
Electric Word plc
(“Electric Word” or “the Company”)
Acquisition of Fieldwork Online Training Strengthens Public Sector Management Information Portfolio
Electric Word, the specialist information publisher, today announces the acquisition of the business and assets of Fieldwork Online Training (“FOT”), the schools management e-learning division of Fieldwork Education Limited (“FEL”). The all-cash consideration comprises an initial payment of £249,000 and a further performance-related cash payment depending on sales in 2005-6. The total deferred consideration payable is expected to be between £150-200,000 and is capped at a maximum of £400,000.
FOT supports the professional development of school managers in the UK and abroad with a suite of online training courses and a bespoke e-learning platform. The business is highly complementary to Electric Word’s current portfolio of education information products including CPD Update, its longest-established continuing professional development newsletter for schools. FOT has site licences in over 200 schools and will benefit from access to Electric Word’s existing customer base including senior managers in 98% of secondary schools in England and Wales. The acquisition will further enhance the Company’s renewable subscription-based revenues and its capacity for organic growth. This fits well with Electric Word’s strategy of combining organic and acquired growth.
In the year to April 2005, FOT generated revenues of approximately £305,000 (unaudited) from a combination of direct sales of site licences to schools and leasing the e-learning platform to larger partners such as the Education and Manpower Bureau in Hong Kong and the University of Cambridge International Examinations syndicate. The average revenue from new direct site licence sales in 2005 has been over £1,000. Following marketing, sales and content investment by Electric Word in the first year of ownership, FOT is expected to be earnings enhancing in the second year and thereafter.
Investment in Continuing Professional Development (CPD) for teachers is at the leading edge of the Government’s education strategy for the next five years. A new schools inspection regime starts in September 2005 which is founded on an assessment of a school’s ability to self-evaluate and prioritise professional development needs. Also in September of 2005, the Teacher Training Agency is to be re-structured as the Teacher Development Agency, putting greater emphasis on the professional development of already-qualified teachers.
Commenting on the acquisition, Julian Turner, Chief Executive of Electric Word, said:
“Fieldwork Online Training is an ideal acquisition for us to bolt on to Electric Word’s public sector management information business. It will broaden the range of existing and new products we can cross-sell to established schools customers and allows us to benefit further from the Government’s commitment to invest in improving professional standards in education.
“The acquisition strengthens our position in the fast-growing and strategically important area of electronic delivery in professional development. I am also delighted that FEL will continue to work with Electric Word as a sales agent and partner in the future development of the business.”
E-learning is a rapidly expanding part of the distance learning and professional development training market. According to the EU's Directorate-General for Education and Culture, e-learning expenditure as a percentage of total workplace training doubled in size in five years from 10% in 2000 to 20% in the current year. The EU predicts that the public sector e-learning market could currently be worth €3bn (£2bn). The UK is expected to be the market in Europe with greatest opportunity for development as suppliers build upon its English language advantage.
Notes to Editors
Electric Word is a specialist information company, made up of two divisions: Public Sector Management Information and Sport and Specialist Consumer. Electric Word employs many formats, including newsletters in both paper and electronic media and conferences, books and special reports. It has a particular strength in renewable subscription products, which accounted for 72% of turnover last year.
Enquiries:
Julian Turner, Chief Executive
Electric Word plc
020 7954 3470
Tim Spratt / Kim Muckle
Financial Dynamics
020 7831 3113
Richard Swindells
Panmure Gordon & Co
020 7459 3600