PRESS RELEASE January 3rd 2006
Electric Word plc
Acquisition of SportBusiness Group Significantly Strengthens Sports Portfolio
Electric Word plc, the specialist information publisher, announces today the acquisition of SportBusiness Group Ltd (“SBG”). SBG is a specialist publishing company operating in the growing markets of commercial sport and sports rights and is highly complementary to Electric Word’s sports division. SBG is being acquired from Sussex Trading Company Ltd for a total maximum consideration of £2.74 million.
SBG’s titles are read by those involved in the business of sport and include: SportBusiness International magazine and website, the trade publication of international sports business with a worldwide readership of senior rights owners, broadcasters and intermediaries; the BritSport yearbook and directory; i-Gaming Business magazine, serving the international online and mobile gaming industry; a range of high-value special reports; and TV Sports Markets, a subscriber-only newsletter analyzing and reporting on television sports rights.
In the twelve months to November 2005, SBG broke even on a turnover of £1.7m (unaudited) and had net current liabilities of £129,000 at the period end. Within Electric Word the business is expected to be immediately earnings enhancing.
Commenting on the acquisition, Julian Turner, Chief Executive of Electric Word, said:
“SBG is a highly complementary acquisition for Electric Word. It strengthens our Sport Division and brings in valuable new competencies in media sales. The business of sport is a high growth market and the addition of SBG’s titles to our own portfolio of sports information products creates an excellent platform for growth, particularly in the run up to the 2012 London Olympics when we expect to benefit from the increasing interest in sport and its commercial development.”
The total maximum consideration of £2.74 million comprises an initial consideration of £2.49 million and contingent performance-related consideration of up to £250,000. The initial consideration is made up of £1.5m payable in the form of 18.75m new ordinary shares in Electric Word and £987,500 of preference shares convertible at 10p after two years, during which time up to £625,000 may be redeemed at the Company’s option on payment of interest at a rate of 2% per annum. The contingent payment of up to £250,000 is payable in 2007 conditional on SBG meeting agreed performance criteria in 2006 and 2007.
As a result of the acquisition Sussex Trading Company Ltd (“STC”) will become the largest single shareholder in Electric Word plc. STC is owned by Stewart Newton, the founder of Newton Investment Management. Stewart Newton commented:
“The acquisition by Electric Word will benefit SBG’s clients through its stronger infrastructure and by enabling a broader range of services. Electric Word is a dynamic publisher operating in very exciting markets. I look forward to sharing in its future growth and development for many years to come.”
ENDS
Notes to Editors
Electric Word is a specialist information company comprising two divisions: Public Sector Management Information and Sport. Electric Word employs many publishing formats, including newsletters in both paper and electronic media, conferences, books, special reports and online training. It has a particular strength in renewable subscription products, which last year accounted for 72% of turnover.
Enquiries:
Julian Turner, Chief Executive
Electric Word plc
020 7954 3470
Tim Spratt / Kim Muckle
Financial Dynamics
020 7831 3113
Matthew Robinson
Panmure Gordon & Co
020 7459 3607