Business Headlines
Voyager Learning Company To Combine with Cambium Learning To Create a Leading Provider of Educational Intervention Services
Voyager Learning Company —Monday, June 22, 2009
DALLAS, TX & NATICK, MA - June 22, 2009 – Voyager Learning Company (Pink Sheets: VLCY.PK), a publisher of education materials and provider of education solutions for the K-12 market, today announced the signing of a definitive merger agreement to combine its business with Cambium Learning, Inc., an education company serving the needs of at-risk and special student populations in the Pre-K through grade 12 market. In 2008, Cambium Learning had revenues of approximately $100 million and Voyager Learning Company reported $98.5 million in revenues. The combination of the
companies’ businesses will create a leading provider of education intervention services in the United States.
The business combination will be effected through a newly-formed company, Cambium- Voyager Holdings, Inc., which will acquire both companies and issue shares in the combined company to stockholders of each of Voyager Learning Company and Cambium Learning. Cambium-Voyager Holdings will be majority owned by VSSCambium Holdings III, LLC, which will be majority owned by Veronis Suhler Stevenson, a leading private equity investor in the information, education and media industries and current owner of Cambium Learning. Upon completion of the mergers, Cambium-Voyager Holdings will be a public company, and anticipates having its common stock approved for listing on the NASDAQ Global Market.
Under the terms of the merger agreement, each Voyager Learning Company stockholder will be entitled to receive, in exchange for each share of Voyager Learning Company common stock owned by such stockholder, the following consideration: (i) at the election of the stockholder, either one share of common stock of Cambium-Voyager Holdings or $6.50 in cash, subject to a potential pro-rata reduction as described below; and (ii) a prorata amount of certain tax refunds received by Voyager Learning Company prior to the closing of the transaction; and (iii) a contingent value right payable periodically during the period commencing nine months after closing and expected to end on or about October 15, 2013. Neither the amount of the tax refund distribution nor the maximum value of the contingent value right can be determined at this time. However, the total per-share amount payable in respect of both of these two forms of consideration on a combined basis is not expected to exceed $0.89 per share of Voyager Learning Company common stock and may be substantially less than that amount, depending on certain factors specified in the merger agreement.
In the aggregate, the Voyager Learning Company stockholders will receive consideration of approximately $194 million (excluding contingent value rights and distributions of certain tax refunds received prior to closing), based on the agreed price of $6.50 per share used by the parties to determine the relative contribution of the two companies. The sole stockholder of Cambium Learning will receive aggregate consideration of approximately $158 million (excluding the warrants described below), consisting of 20,454,312 shares of Cambium-Voyager Holdings common stock issued in the merger at the ascribed value of $6.50 per share. In addition, the stockholder of Cambium Learning will receive a warrant to purchase additional shares of Cambium-Voyager Holdings common stock based on the amount of Cambium Learning debt retired prior to closing and certain other
agreed upon matters. In connection with the transaction, the combined company will assume approximately $168 million of indebtedness of Cambium Learning, for total consideration under the merger agreement of approximately $520 million.
The amount of cash available to satisfy cash elections by Voyager Learning Company stockholders will be determined by an agreed formula that is dependent on, among other things, the cash generated by Voyager Learning Company prior to closing, but the amount of cash available for cash elections is limited to a maximum of $67,500,000 in the aggregate. If the amount of cash available for the cash elections is insufficient to accommodate all of the aggregate cash elections made by the Voyager Learning Company stockholders, then the stockholders electing to exchange shares for cash will be subject to a pro-rata reduction in accordance with certain agreed procedures set forth in the merger agreement. The shares of Voyager Learning Company common stock that are not exchanged for cash will be exchanged for shares of Cambium-Voyager Holdings common stock.
The transaction brings together two companies that operate in adjacent markets and have a shared focus on helping struggling students succeed. Through its business units, Voyager Expanded Learning, ExploreLearning and Learning A-Z, Dallas-based Voyager Learning Company provides in-school core reading programs, reading and math intervention programs, reading, science and math technology platforms and professional development programs for school districts throughout the United States. Cambium Learning, headquartered in Natick, Massachusetts, provides research-based, culturally responsive and proven instructional materials, services and technology to help educators raise the achievement level of Pre-K through grade 12 students underserved by existing instructional materials. Cambium Learning’s companies and brands include Sopris West Educational Services, Kurzweil Educational Systems, and IntelliTools. As of December 2008, Cambium Learning had a staff of 275, and Voyager Learning Company had 375 employees.
“As one company, we will be a leading education intervention provider solely focused on changing the learning trajectory for more than 20 million struggling students in our country and helping them reach their learning potential,” said Ron Klausner, President of Voyager Learning Company, who will be named Chief Executive Officer of the combined company upon closing of the transaction. “We look forward to continuing to offer proven effective, research-based products and improving our capabilities by integrating components such as technology and support across product lines.”
“We’ve long respected the work of Voyager and the position Voyager maintains in the market – serving the same student populations as Cambium. Combining these two companies, which largely operate in adjacent market segments with complementary products, brings together market-leading intervention programs and services, a strong research base, and some of the best authors and researchers in the industry,” said Dave Cappellucci, Chief Executive Officer of Cambium Learning, who will become President of the combined company upon closing. “Together, we will be able extend our reach and help many more struggling students.”
“These two companies have a terrific collection of brands, and each meets the profound needs of the most challenged learners in the U.S. The timing is ideal to combine forces to offer products and services that address the critical needs of an estimated $4.5 billion annual market,” added Scott Troeller, Partner at Veronis Suhler Stevenson. “The recently enacted American Recovery and Reinvestment Act addresses many of the critical educational challenges we face – and provides considerable new funding precisely targeting the students served by the combined company.”
The board of directors of Cambium-Voyager Holdings will consist of a total of nine directors, five designated by Cambium Learning, and four designated by Voyager Learning Company, including Richard Surratt, who will cease to be President and Chief Executive Officer of Voyager Learning Company upon closing, but will serve as a director of the combined company. George Logue, co-founder and Executive Vice President of Cambium Learning, will continue his service as Executive Vice President of the combined company. Cambium-Voyager Holdings will be headquartered in Dallas.
The transaction is expected to be completed in October 2009, and is subject to approval by the stockholders of Voyager Learning Company, customary regulatory approvals, including expiration or termination of any applicable waiting period under the Hart-Scott- Rodino Antitrust Improvements Act of 1976, and other closing conditions.
Cambium-Voyager Holdings is represented by Lowenstein Sandler PC in connection with this transaction, and Voyager Learning Company is represented by Perkins Coie LLP. Allen & Company LLC serves as financial advisor to Voyager Learning Company. Voyager Learning Company will hold a conference call at 4:00 p.m. Eastern Time on Tuesday, June 23, 2009, to discuss the details of the transaction. To listen to this conference call, please dial (888) 688-0384 and enter ID #15899624 at 4:00 p.m. Eastern Time on June 23, 2009. The call will be recorded and archived until July 21, 2009, and can be replayed by calling (800) 642-1687 and entering ID #15899624. The conference call will also be webcast and archived on the Voyager Learning Company website at www.voyagercompany.com.
About Voyager Learning Company
Voyager Learning Company (Pink Sheets: VLCY.PK) is based in Dallas, Texas, and is a publisher of education materials and provider of education solutions serving the K-12 market. Through its product lines, which include Voyager Expanded Learning, ExploreLearning and Learning A-Z, Voyager Learning Company is a leading provider of K-12 curriculum products, in-school core reading programs, reading and math intervention programs, and professional development programs for school districts throughout the United States.
About Cambium Learning
Cambium Learning, which has established itself over 26 years as a nationally recognized leader in education, is an education company that provides research-based, culturally responsive and proven instructional materials, services and technology to help educators raise the achievement level of those pre-K through grade 12 students underserved by existing instructional materials. Founded in 2002 and based in Natick, Massachusetts, Cambium Learning believes that all students, including minority, at-risk, economically disadvantaged and special student populations can achieve at a high level. Cambium Learning companies and brands include Sopris West Educational Services, Kurzweil Educational Systems, and IntelliTools.
About Veronis Suhler Stevenson
Veronis Suhler Stevenson (www.vss.com) is a private equity and mezzanine capital fund management company dedicated to investing in the information, education and media industries in North America and Europe. VSS provides capital for buyouts, recapitalizations, growth financings and strategic acquisitions to companies and management teams with a goal to build companies both organically and through a focused add-on acquisition program. To date, VSS equity and mezzanine funds have invested in 63 platform companies, which have in turn completed over 270 add-on acquisitions resulting in a portfolio with realized and unrealized enterprise values totaling over $14 billion.
Contact: Voyager Learning Company, Shannan Overbeck, (214) 932-9476, soverbeck@voyagerlearning.com
or
Veronis Suhler Stevenson, Jim Rutherfurd, (212) 381-8446, rutherfurdj@vss.com
or
Cambium Learning, Laurie Burke, (508) 647-1340 ext. 104, lburke@cambiumlearning.com
