Sanoma acquires Iddink, a leading Dutch educational platform and service provider

Sanoma Corporation, Stock Exchange Release, 11 December 2018 at 23:45 EET

Sanoma acquires Iddink, a leading Dutch educational platform and service provider

Sanoma intends to acquire Iddink Group (“Iddink”), a leading Dutch educational platform and service provider. In 2017, net sales of Iddink were EUR 141 million and operational EBITDA was EUR 27 million. Iddink operates in the Netherlands, Belgium and Spain. It employs approx. 300 people in total, about half of the employees working in educational technology. The purchase price on a cash and debt free basis is EUR 277 million, representing an EV/EBITDA multiple of 6.4x on reported EBITDA and 10.3x on operational EBITDA.

Iddink is a leading educational platform and service provider for secondary education in the Netherlands, owned by private equity firm NPM Capital and Iddink’s management. Iddink’s integrated learning and school administration platforms provide its customers – pupils, parents, schools and teachers – with access, communication and learning tools. With the acquisition, Sanoma enters the integrated digital educational platform business for secondary and vocational education in the Netherlands, similar to its current offering in Poland. Iddink will remain a separate operational company within Sanoma Learning and continues to serve all educational publishers and content providers in its markets.

Iddink’s business is complementary to Sanoma’s Dutch learning subsidiary Malmberg, a leading educational publisher for primary, secondary and vocational schools. Based on pro forma 2017, the acquisition increases the share of Learning to around 31% of Sanoma’s annual net sales (2017 adjusted: 24%) and to around 39% of operational EBITDA incl. TV-programming rights, pre-publication costs and rental book depreciation (2017 adjusted: 32%), and improves the revenue visibility given Iddink’s multi-year customer contracts.

“I am very happy to announce our intention to acquire Iddink, which is a clear next step in growing the Learning business within Sanoma. Iddink has close, long-term relationships with its customers and a solid track record. Together we have a clear, shared vision to support teachers and schools to excel at developing the talents of every child. Iddink provides us with a strong platform for future growth in the Netherlands, Belgium and Spain. The acquisition significantly increases Learning’s share of Sanoma’s operational EBITDA”, says Susan Duinhoven, President and CEO of Sanoma.

About Iddink

In 2017, net sales of Iddink were EUR 141 million and operational EBITDA was EUR 27 million (incl. rental book depreciation of EUR 16 million). Iddink operates in secondary and vocational education markets in the Netherlands, Belgium and Spain. Its business consists of three business areas: 1) distribution of printed and digital learning methods with strong rental book sales, 2) student information systems, and 3) data analytics and learning solutions. Iddink employs approx. 300 people in total, about half of the employees working in technology. The company has a strong and experienced management team, committed to continue at Sanoma Learning post completion of the transaction.

Sanoma estimates that the acquisition will create annual synergies of approx. EUR 6 million that will be realised in full within 3 years post completion of the transaction. The synergies are expected to come from improved customer offerings and streamlined supply chain.

Purchase price and financing of the transaction

Sanoma intends to acquire Iddink for a cash and debt free purchase price of EUR 277 million, which represents an EV/EBITDA multiple of 6.4x on reported EBITDA and 10.3x on operational EBITDA. Sanoma will finance the acquisition fully with debt and has agreed on a committed bridge facility of EUR 300 million from Nordea Bank Abp and OP Corporate Bank plc. Sanoma plans to refinance the bridge facility with longer term funding prior to closing of the acquisition.

The transaction is subject to customary closing conditions, including the approval of competition authorities and completion of works council consultation procedures at Iddink, and is expected to be finalized in Q2-Q3 2019. After closing, the acquired business will be reported as part of Sanoma Learning SBU.

News conference for analysts, investors and media

A news conference for analysts, investor and media will be held in English by the President and CEO Susan Duinhoven and CFO and COO Markus Holm on Wednesday, 12 December at 10:00 Finnish time (8:00 UK time) at Sanomatalo, Töölönlahdenkatu 2, Helsinki. A live webcast of the conference can be followed via /investors. If you wish to ask questions, please dial one of the following numbers prior to the conference start:

Finland: 0

Sweden:

United Kingdom: 4

United States:

PIN code for the call is 27719394#

The presentation material will be available at /investors when the news conference starts, and an on-demand replay of the webcast shortly after the end of the conference.

Additional information

Investors:

Kaisa Uurasmaa, Head of Investor Relations and CSR, tel. 1

Dutch and Belgian media:

Karlijn Nobel, Communications Director, tel. 6

Finnish and international media:

Marcus Wiklund, Group Communications Director, tel. 7



Sanoma

Sanoma is a front running learning and media company impacting the lives of millions every day. We enable teachers to excel at developing the talents of every child, provide consumers with engaging content, and offer unique marketing solutions to business partners.

With operations in Finland, the Netherlands, Poland, Belgium and Sweden, our net sales totalled EUR 1.4 billion and we employed more than 4,400 professionals in 2017. Sanoma shares are listed on Nasdaq Helsinki. More information is available at

Sanoma Learning

Sanoma Learning is one of Europe’s leading learning companies, serving some 10 million pupils and one million teachers. Through its multi-channel learning solutions it helps to engage pupils in achieving good learning outcomes, and supports the effective work of the professional teachers in primary, secondary and vocational education. Sanoma Learning’s net sales were EUR 318 million and operational EBITDA was EUR 100 million in 2017. Through its local companies, it contributes to some of the world’s best-performing education systems in Poland, the Netherlands, Finland, Belgium and Sweden.