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Electric Word

  • BY: Andrew Hore |
  • POSTED: 10/04/2012 |

Electric Word is selling the business and assets of its e-commerce website The School Run. 

My Child was rebranded as The School Run in 2010 and it has been losing money. Jade Creative is paying £1 plus £2,000 in stock. Electric Word will receive a royalty of 6% of turnover in the first year rising to 8% of turnover in the third year. The business generated £329,000 last year. Electric Word also retains an interest in a future disposal of the business through the issue of non-voting B shares.

Jade is owned by Dani Zur, who used to manage the Electric Word consumer division.  The gross assets acquired were valued at £140,000. Electric Word has the option to buy back the business after 10 years for the greater of £1.5m or 65% of turnover.

Electric Word invested an initial £137,500 for a 10% stake in My Child before spending a further £512,500 to take the stake to 50.1% in November 2007. In 2008, there were £340,000 of one-off restructuring costs for closing its call centre and magazine. At the end of November 2008, My Child intangibles had a carrying value of £118,000. Since then this has been fully amortised.

Electric Word wants to concentrate on its professional business.

At 2.5p a share, Electric Word is valued at £7.43m.

Last month, Nigel Wray increased his stake in Electric Word to 11%.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFMarch2012_30.pdf

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