NEW NURSERY ACQUISITION PROPELS NORD ANGLIA TO MARKET LEADERSHIP38135Nord Anglia Education PLC ("Nord Anglia" or the "Company"), the nursery, education and training company, is pleased to announce that it has conditionally agreed to acquire a portfolio of up to 28 nurseries from Jigsaw Day Nurseries Limited ("Jigsaw"), for approximately £13.25 million, payable in cash (the "Jigsaw Acquisition").This acquisition represents further progress in the implementation of Nord Anglia´s strategy to strengthen its position in the UK nursery sector and builds on the proposed acquisition of Leapfrog, announced on 30 April 2004 (the "Leapfrog Acquisition"). After completion of the two acquisitions, Nord Anglia will operate up to 101 nurseries offering approximately 9,600 places, making it the market leader in the UK by both number of nurseries and by places offered. In particular, the Leapfrog Acquisition brings with it improved systems and an experienced management team able to manage the enlarged division. The acquisition of Leapfrog is expected to complete on 11 June 2004, following the Extraordinary General Meeting of the Company to be held on 9 June 2004, and following the Placing and Open Offer which, following approval, will raise £23m before expenses. The Jigsaw Acquisition of up to 28 nurseries is conditional on the grant to Nord Anglia of licenses to operate each of the nurseries acquired from Jigsaw, which licenses will be issued by Ofsted. As at the date of this announcement Ofsted has agreed to grant 18 licenses. Jigsaw will be providing certain transitional services to Nord Anglia in relation to the nurseries to be acquired at a maximum cost of £222,328. In addition there will be an apportionment of certain outgoings connected to the nurseries to be acquired, provided that Nord Anglia´s maximum contribution may not exceed £500,000. In the year to 31 March 2003, the 28 nurseries to be acquired had turnover of £15.2 million and made a profit before interest and tax of approximately £0.8 million. The assets being acquired as part of the Jigsaw Acquisition have an immaterial value, largely because Jigsaw's properties are held on a leasehold basis. The Directors have valued the Jigsaw Acquisition based upon the revenue and profit streams arising from the Jigsaw nurseries and the price of the nurseries has been decided on that basis. The Jigsaw Acquisition will be funded by an additional facility of £14m provided by AIB Group (UK) plc. Jigsaw operates 36 nurseries in the UK, offering day care for children under school age. The 28 nurseries Nord Anglia is acquiring represent the best fit with the Leapfrog nurseries and those currently owned by Nord Anglia and the Directors believe that benefits will accrue from bringing the 28 Jigsaw nurseries into a larger group. The Board believes that the enlarged nursery division's leading position will provide a stable platform from which to grow all the groups divisions including the higher margin educational outsourcing and international schools divisions. The Leapfrog Acquisition remains subject to shareholder approval, and an Extraordinary General Meeting of the Company has been convened to consider the Leapfrog Acquisition, on 9 June 2004. Further to its announcement on 30 April, the Board confirms that it is in exclusive discussions to complete the sale of its UK Schools divisions. Shareholders will be informed of further developments in due course. Commenting on the Jigsaw Acquisition, Kevin McNeany, Chairman of Nord Anglia, commented: "I am delighted to be able to announce this acquisition, which represents a major step in the implementation of the Board´s stated strategy of expanding the nursery division. This acquisition, coupled with the recently announced acquisition of Leapfrog, will represent a step change in the size of our nursery division. It clearly establishes Nord Anglia as the market leader in the UK nursery sector. I am particularly excited about the potential results of integrating the Jigsaw |
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