Electric Word subscribed GBP137,500 in cash for new shares in August 2007 to acquire a 10% equity stake in MyChild and has now exercised its option to pay GBP512,500 to acquire a shareholding of 40.1% from existing MyChild shareholders to increase its shareholding to 50.1% and has agreed to lend a maximum of an additional GBP400,000 to MyChild to enable it to repay existing shareholder loans. Of the total second tranche investment of GBP912,500, payment of GBP400,000 has been made now, with GBP512,500 being deferred to May 31, 2008.
Electric Word has the option to acquire the remaining 49.9% of MyChild, which would take its shareholding to 100%, at any time from December 1, 2008 to March 1, 2009 with the valuation fixed at a multiple of six times EBITDA for the year to November 30, 2008, less an adjustment for movement in net assets, and subject to an overall cap.
