Rm Regulatory News (RM.)

4 Nov 2008 07:00

4 November 2008

RM acquires US classroom technology solutions business Computrac

RM announces the acquisition of US specialist education technology business Computrac, for a total cost of up to $8.0m. Computrac is a leading provider of interactive classroom technology solutions to schools in the Southeastern United States. The acquisition of Computrac brings a successful and profitable business into the Group and provides a platform for further expansion in the US. 

Computrac already sells RM's whole-class teaching software and its extensive customer base makes it an excellent channel for other RM Group products and intellectual property. It will be integrated with RM Educational Software Inc., the Group's established and profitable US subsidiary, with RM's current International Managing Director relocating from Boston to Atlanta to oversee the integration and to run the new combined business. The combined business will be substantially larger than the Group's current US operation and provides an excellent platform for further expansion in the Southeastern US and beyond. 

Computrac designs, supplies and installs sophisticated interactive teaching solutions, comprising electronic whiteboards, interactive pads, student voting devices, whole-class teaching software, digital projectors and other audio-visual products. Based in Georgia, Computrac has well-developed relationships with School Boards in the Southeastern United States and has supplied over 10,000 K-12 (kindergarten to 12th grade) classrooms. It was founded in 1998 by the current senior management team, who will remain in place to oversee the Company's further development.

Computrac's revenues in the year to July 2008 were $28.8m, with operating income of $1.3m. RM will pay an initial cash consideration of $3m and will also assume debt of $4.3m. Deferred consideration of up to $0.7m is payable in cash, subject to the achievement of certain performance conditions. These amounts are being financed from a £25 million, five-year facility negotiated with HSBC in July 2008. Net assets at the date of completion are estimated to be $1.2m.

Terry Sweeney, Chief Executive of RM, said:

"The US represents a significant development opportunity for RM and Computrac makes an excellent addition to the RM Group. We've already had significant success together selling RM's software products and I'm excited by the opportunity of selling other RM products and intellectual property. The UK adopted interactive whole-class teaching technology ahead of the US, and there's significant market potential in the US, both for our software and for the integrated solutions Computrac specialises in. This acquisition is a major step forward in our international expansion, bringing critical mass to our US presence."

Kevin Talentino, CEO of Computrac, said: 

"We've found a great home with RM - they share our values and our commitment to providing the best technology for education and the best service for customers. Between us we've got the best whole-class teaching solutions; I'm confident that, working together, we can provide great products and services that really make a difference in the classroom - and grow the Computrac business in the process."

RM is holding a telephone briefing for analysts at 9.00am on Tuesday 4 November 2008. The dial in number for the briefing is +44 (0)1452 541076; passcode 71440421.

A presentation will be available at www.rm.com/investors from 9:00am.

For further information, please contact: 

Notes:

Founded in 1973, the RM Group is a leading provider of educational products and services to schools, colleges and universities, local government and central government education departments and agencies. RM works closely with educationalists to create new products, processes and technology which improve teaching and learning. RM is listed on the main market of the London Stock Exchange under the symbol RM.L, ISIN GB0002870417.

RM Educational Software Inc., a wholly-owned subsidiary of RM plc, was established in 2003 to sell RM's software products, including RM Easiteach and RM MathsAlive, across the United States. Based in Boston, MA and employing 15 people, it is headed by Kevin Pawsey, RM's International Managing Director. RM Educational Software Inc moved into profitability in 2007 and doubled revenues in 2008. 

Computrac was founded in 1998 by Kevin Talentino as a supplier of information technology products to education customers. It started supplying interactive whiteboards in 1999 and has subsequently specialised in supplying and installing sophisticated interactive classroom solutions. Computrac has been supplying RM products for two years. It is one of the largest suppliers of interactive and audio-visual technology to K-12 schools in the United States. Computrac is based in Ball Ground, near Atlanta, Georgia, and employs 54 people.