Learning Technologies Group Regulatory News (LTG)

Learning Technologies Group plc

("LTG" or "the Group")

Acquisition of Preloaded

Learning Technologies Group plc (AIM: LTG), the leading e-learning company, is pleased to announce that on 12 May 2014 it entered into an agreement to acquire the entire issued share capital of Preloaded Limited ("Preloaded") for an initial consideration of approximately £2.2 million including anticipated cash in the balance sheet of Preloaded on completion of £1.47 million.

Preloaded was founded in 2000 and has a leading reputation as a BAFTA winning applied games studio, designing games to utilise the power of gaming to engage, educate and communicate in the areas of Learning, Health, Engagement and Training. Preloaded works for organisations across the education, entertainment, publishing, advertising and broadcasting sectors with clients including Amplify (a subsidiary of News Corp), Disney, Science Museum Group, Wellcome and the BBC.

In its unaudited management accounts for the year ended 31 March 2014, Preloaded generated revenues of £1.8 million, EBITDA of £0.59 million and profit before tax of £0.57 million. Net assets as at 31 March 2014 are estimated at £1.6 million.

LTG has agreed to acquire Preloaded for £2.2 million, to be satisfied by approximately £1.6 million in cash (of which £1.2 million will be paid upon completion and it is expected that £0.4 million will be paid during the first twelve months) and 3,125,000 ordinary shares (the "Consideration Shares") in LTG. Further consideration of up to £3.4 million may be payable to be satisfied in ordinary shares, dependent on financial performance.

The acquisition of Preloaded marks a further step in LTG's 'buy and build' strategy to consolidate the fragmented e-learning market and create a global leader in e-learning with in excess of £50 million revenue.

According to recent research by Ambient Insight, 'The 2012-2017 Worldwide Game-based Learning and Simulation-based Markets', the global market for games-based and simulation learning is set to increase from $4bn in 2012 to $9bn by 2017. As LTG's second acquisition, this is a strategic move to add the services of a specialist learning games company to the Group, strengthening LTG's position as a global end-to-end service provider of learning technologies.

The Board believes that the purchase of Preloaded brings significant organic growth prospects, as the acquisition will enhance the Group's offering and skillset to existing clients and brings substantial opportunity to expand the Group's client base through Preloaded's current relationships. Preloaded will bring a further 20 staff to the Group as well as additional offices in London. All of the senior management team and staff are expected to remain with the business.

The cash consideration will be met from the Group's existing resources and application has been made to AIM for the listing of the 3,125,000 Consideration Shares, which will rank pari passu with LTG's existing ordinary share capital.

The cash element of the acquisition is intended to be self-financing and the vendors will warrant that sufficient working capital is retained in the Preloaded business following completion.

Admission of the Consideration Shares to trading on AIM is expected to be on 16 May 2014.

Jonathan Satchell, CEO of LTG, commented:

"This exciting acquisition will bring additional skillsets, clients and talent to the Group, opening up a new avenue in the important discipline of learning games and simulations for LTG to satisfy the growing demand for e-learning.

"Preloaded complements our existing businesses Epic and the recently acquired LINE and brings substantial opportunity to grow organically."

13 May 2014

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