ESPRESSO TO ACQUIRE CHANNEL 4 LEARNING TO BECOME THE DEFINITIVE PLACE FOR VIDEO-BASED RESOURCES FOR SCHOOLS

21 March 2007

Espresso Group and Channel 4 today announced they have reached an agreement in principle for Espresso to merge Channel 4 Learning, Channel 4’s award-winning education rights exploitation business, into its portfolio of businesses. The transaction is subject to Espresso shareholder approval and is expected to complete before Easter.

Channel 4 Learning will join Espresso Education, Netmedia Education and Education Media Delivery as part of the Espresso Group.  The acquired business will be merged with Espresso Education to provide video-rich curriculum services to primary and secondary schools throughout the UK and abroad.  Both businesses are award-winning market leaders in video-based, interactive teaching and learning resources.

As part of the deal, Espresso Group will acquire the assets of Channel 4 Learning, as well as a licence agreement for the exclusive commercial exploitation of Channel 4’s existing and future schools’ television programmes, where Channel 4 has the rights.  The undisclosed purchase price will be paid in shares of Espresso Group. 

For clarity, Channel 4’s public service commitment to commissioning and broadcasting education content remains unchanged as a core part of its remit under Channel 4’s Head of Education, Janey Walker. Channel 4’s spend on education in 2007 will be approximately £75m.

The deal will further enhance Espresso’s position in the UK education sector where it already has nearly 50% market penetration in English primary schools. Channel 4 will retain a minority stake in the combined business and Michael Hodgson, Managing Director of 4Rights, Channel 4’s rights exploitation and distribution arm, will join the Espresso Board.

"The coming together of these two organisations will create a unique force in the education market,” said Richard McGrath, Managing Director of Espresso Group. “As the role of ICT in primary and secondary schools continues to increase, we are pleased to be able to provide customers with an amazing range of the best educational video content backed up by first class customer support.  The passion displayed by both companies to create breakthrough, innovative resources that meet the needs of schools is what will continue to drive our product suite forward and fuel continued growth.”

Lewis Bronze, co-founder and Chief Executive Officer of Espresso Education commented: “This is a remarkable step forward, as we celebrate the company’s 10th anniversary. Espresso has proved the success of our original vision to deliver an engaging video-rich curriculum service to primary schools.  Now we want to build on that success in the secondary sector.  We’re delighted to be welcoming new colleagues from Channel 4 Learning and look forward to exciting future challenges.”

Michael Hodgson, Managing Director of 4Rights, said: “Channel 4 is committed to growing the Channel 4 Learning business in an increasingly competitive environment and believes Espresso represents the best fit to achieve that goal. The new partnership will allow us to strengthen Channel 4 Learning’s presence in schools throughout the UK.”

Janey Walker said: “Channel 4 has played a major role in producing distinctive education material, and the partnership with Espresso will enable us to offer these resources to the widest possible audience. The Channel will continue to play a vital public service role in commissioning and scheduling innovative education content for 14 to 19 year olds.”

The deal, which is subject to Espresso shareholder approval, means Channel 4 will join ITN (Independent Television News Limited) and Beringea Limited as significant shareholders in Espresso Group.

Espresso Group

The London-based company delivers video, multimedia resources and learning platform services to UK schools. Espresso Group consists of three subsidiary businesses including Espresso Education (the UK market leader in the provision of cross curricular content services to schools), Netmedia Education (the UK market leading learning platform business - acquired in 2006) and Education Media Delivery (the leading content delivery service for local authorities and schools in the UK - launched in 2005).

Espresso Education

With over 8600 subscribing schools using its resources, Espresso Education is the leading digital curriculum service in the UK. Espresso is a comprehensive library of high quality, video-rich teaching resources that support teachers, motivate pupils and raise standards in the classroom. Espresso combines video clips, interactive news articles, multi-media activities, websites and worksheets, all categorised into modules that directly support all tailored the National Curriculum and QCA Schemes of Work. The service updates on a weekly basis, giving access to fresh, relevant resources that draw on topical events to bring learning to life.

Channel 4 Learning

Channel 4 Learning, Channel 4 Television’s educational publishing and distribution arm, was established in 1994 when the Channel 4’s schools television service was first broadcast. Since then, the formal education market has changed considerably, but what has remained a constant is Channel 4 Learning’s commitment to:

• Publishing useful and innovative multi-media resources designed to motivate and inspire learners aged 4 – 19 and empower their teachers;
• Being a leading producer and worldwide distributor of educational multimedia content to audiences who want to explore and extend their own boundaries;
• Fulfilling Channel 4’s educational public service remit through the provision of a teaching context for its programmes.

More than 400 hours of educational programming broadcast on Channel 4 each year are enhanced by Channel 4 Learning’s range of multi-media resources on CD-ROM, DVD, DVD-ROM, online and other digital platforms.

Channel 4 Learning’s flagship resource, ClipBank, is an extensive digital library of educational clips, selected from over 800 hours of award winning programmes. Currently available across eight secondary core curriculum areas: Design and Technology, Business, Geography, History, Modern Foreign Languages (French, German and Spanish) and Science, each library contains around 250, one to five minute clips.