18 December 2015

Electric Word plc Proposed sale of 70 per cent. interest in iGaming Business Limited Electric Word plc (AIM: ELE, “Electric Word”, the “Company”) today announces that it has conditionally agreed to sell its indirect 70 per cent. shareholding in iGaming Business Limited (“iGB”), to Clarion Events Limited (“Clarion”), a global events business with a portfolio of event and media businesses across a range of vertical markets. The Sale values the whole of iGB on a cash free debt free basis at £19.7 million. The holder of the remaining iGB Shares, Michael Caselli, has also agreed to sell 5.1 per cent. of the issued iGB Shares and will retain the balance. Highlights 

Conditional sale of 75.1 per cent. of the shares of iGB, 70 per cent. by SBG, a whollyowned subsidiary of Electric Word (who holds 70 per cent. of iGB), and 5.1 per cent by Mr Caselli (who holds 30 per cent. of iGB), which values the whole of iGB on a cash free debt free basis at £19.7 million.

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The Gaming Interests generated 2014 revenues of £5.4 million and 2014 EBITDA of £2.0 million after allocation of central costs.

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The base cash consideration payable to SBG of £13.8 million will be adjusted to reflect SBG’s share of Net Debt and Net Working Capital at Completion.

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Net cash proceeds of the Sale receivable by SBG on Completion are expected to be £12.2 million.

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Electric Word considers that iGB’s potential can best be realised within a business with a larger events portfolio and online gaming, which is the focus of iGB’s business, has a different risk profile than that faced by the Group’s other operations.

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The Sale is also in line with the Existing Group’s strategy of concentrating on a smaller number of markets to enable the Existing Group to make more focused investments in developing higher-value digital products and related services.

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The Board is considering making a capital return to shareholders.

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The Sale is, inter alia, subject to Shareholder approval.

A circular will be distributed to Shareholders as soon as practicable ahead of a General Meeting convened to seek the approval of Shareholders for the Sale, which is expected to take place at 10.00 a.m. on 4 January 2016, and will shortly be available on the Company’s website at www.electricwordplc.com.

Julian Turner, Chief Executive of Electric Word, said: “I am delighted that we have reached agreement to sell iGB to Clarion at an attractive valuation. iGB has performed exceptionally well in recent years, led by a talented management team and exceptional staff. I would like to thank them for their excellent work over ten years as part of Electric Word and I strongly believe that both they and the business will continue to thrive under Clarion’s ownership.” Enquiries Electric Word plc

+44 (0) 20 7265 4170

Julian Turner, Chief Executive William Fawbert, Finance Director Trillium Partners Limited (Financial adviser to Electric Word)

+44 (0) 20 3008 8375

Philip Mastriforte Andrew Zelouf Panmure Gordon (UK) Limited (Nominated adviser and broker to Electric Word)

+44 (0) 20 7886 2500

Andrew Potts Notes to Editors Electric Word plc is a specialist media group supporting professional education, compliance and management through a wide range of digital, paper and live formats. Its approach is to identify niche communities within its market sectors and fulfil their key information, professional development, best practice and compliance needs. Increasingly, its aim is to provide higher-value services and decision-critical data that help its customers to achieve their key personal and organisational objectives. It achieves this by developing a deep understanding of its sectors and its customers' challenges and critical information requirements. Electric Word provides content in many different formats, including subscription websites, journals, magazines, events, face-to-face training, online training, books, special reports, bespoke research and consultancy. Competencies developed in one sector can then be transferred to another as opportunities arise. Trillium Partners Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Electric Word plc and no one else in connection with the matters referred to in this announcement and apart from the responsibilities and liabilities, if any, which may be imposed on Trillium Partners Limited by the Financial Services and Markets Act 2000 and the regulatory regime established thereunder, Trillium Partners Limited will not be responsible to anyone other than Electric

Word plc for providing the protections afforded to clients of Trillium Partners Limited or for providing advice in relation to the matters referred to in this announcement. Panmure Gordon (UK) Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Electric Word plc and no one else in connection with the matters referred to in this announcement and apart from the responsibilities and liabilities, if any, which may be imposed on Panmure Gordon (UK) Limited by the Financial Services and Markets Act 2000 and the regulatory regime established thereunder, Panmure Gordon (UK) Limited will not be responsible to anyone other than Electric Word plc for providing the protections afforded to clients of Panmure Gordon (UK) Limited or for providing advice in relation to the matters referred to in this announcement.

Proposed sale of 70 per cent. interest in iGaming Business Limited 1. Introduction Electric Word announces today that its wholly-owned subsidiary, SBG, has entered into a conditional agreement with Clarion pursuant to which SBG has agreed to sell its 70 per cent. shareholding in iGB to Clarion. The holder of the remaining iGB Shares, Michael Caselli, has also agreed to sell 56,100 iGB Shares to Clarion, representing 5.1 per cent. of the issued iGB Shares, and will retain the balance. The Transaction values the entire issued share capital of iGB on a cash free debt free basis at £19.7 million. The base cash consideration payable to SBG of £13.8 million will be adjusted by SBG’s share of Net Debt and Net Working Capital, to be calculated through a completion accounts process. After taking into account the Group’s costs associated with the Sale and the repayment of an intercompany balance owing by the Continuing Group to iGB, it is expected that the net proceeds of the Sale receivable by SBG on Completion will be approximately £12.2 million. Pursuant to Rule 15 of the AIM Rules, the Sale is deemed to constitute a fundamental change of business of the Company, which requires the approval, by way of an ordinary resolution, of the Shareholders at the General Meeting. 2. Background to and reasons for the Sale The Company acquired SBG in early 2006 for £2.7 million, and included as part of the acquisition was a controlling interest in iGB. iGB has grown strongly since 2006, particularly since developing a magazine and a series of conferences aimed at gaming affiliates with the assistance of a US-based joint venture partner, Affiliate Media. Affiliate Media provided marketing support for the iGB affiliate business in return for a share of the net profit from the joint venture pursuant to the terms of the Affiliate Contract. In January 2011, SBG bought Affiliate Media out of its benefits and obligations under the Affiliate Contract. Following the Sale, SBG will no longer be in a position to fulfil its obligations under the Affiliate Contract, which will therefore be terminated on Completion for no consideration. After Completion, SBG will receive no further share of the net profit from the Affiliate Contract. Given the Existing Group’s controlling 70 per cent. interest in iGB, the results of iGB are consolidated as part of the Existing Group’s financial statements, and the 30 per cent. interest in iGB held by Mr Caselli has been reflected as a non-controlling interest in the Existing Group’s consolidated income statement. For the year ended 30 November 2014, the Gaming Interests generated revenues of £5.4 million and EBITDA of £2.0 million after allocation of central costs. These figures are unaudited and have been extracted from the Existing Group’s consolidated financial statements for the year ended 30 November 2014. Over the last four years, the gaming events business has grown significantly. With the majority of the profits of the Gaming Interests now derived from the events business, the Directors consider that the potential of the business can best be realised within a business

with a larger events portfolio. The Directors are also of the view that online gaming, which is the focus of iGB’s business, has a different risk profile to that faced by the Existing Group’s other operations. The Directors have carefully considered the risks and rewards associated with the Group’s ownership of its Gaming Interests. The Directors have been pleased with the historic performance of the Gaming Interests but believe the Sale provides an opportunity to realise its 70 per cent. shareholding in iGB at a valuation that the Directors believe is attractive at this time. The Sale is also in line with the Existing Group’s strategy, as set out in its annual report and accounts for the year ended 30 November 2014, of concentrating on a smaller number of markets to enable the Existing Group to make more focused investments in developing higher-value digital products and related services. The Gaming Interests and SBG together comprise the Existing Group’s Sport & Gaming division. SBG provides business insight, data and analysis to professionals in the global business of sport as well as owning the Gaming Interests. SBG will continue to be part of the Continuing Group after Completion. For the year ended 30 November 2014, iGB’s statutory accounts showed a profit before taxation of £0.7 million and, at 30 November 2014, iGB had gross assets of £6.7 million and net assets of £0.8 million. These numbers take account of the net profit payable to SBG under the Affiliate Contract (and therefore do not include all profits from the Gaming Interests) and fees payable for the Existing Group’s management services. 3.

Strategy following Completion

Following Completion, the Directors will continue developing the Continuing Group’s operations in the sport, education and health markets, investing in new products and services. Future growth is expected to be driven by investment in both technology and people to build a business based on deep market knowledge and high-value solutions to key customer needs. Following Completion, the Continuing Group will have exited from the gaming market. In addition, with the sales of Radcliffe Solutions Limited and Radcliffe Publishing Limited in 2015 and the Sports Performance business in 2014, the Health division is now solely focused on the Speechmark publishing business which serves both the Health and Education markets. In order to simplify its future financial reporting, the Continuing Group will report Speechmark as part of the Education division and thus the Continuing Group will report on three business divisions, namely Sport, Education and Central costs. The Sport division provides subscription websites and magazines for sports industry professionals who work in governing bodies, the media, sports marketing, sponsorship and club and event management, and its brands include SportBusiness and TV Sports Markets. The Education division consists of Optimus Education and, following Completion, Speechmark. The Optimus Education brand supports the professional development of teachers and school leaders through an online subscription-based information and training service and through live conferences. Speechmark specialises in resources for speech

therapists, special needs co-ordinators and teachers. The Board has commissioned an external review of growth opportunities in the education sector. The Continuing Group’s revenues for the year ended 30 November 2014, on a proforma basis, would have been £7.1 million. This figure is unaudited and has been prepared for illustrative purposes only. The Continuing Group’s Adjusted EBITDA for the year ended 30 November 2014, on a proforma basis, would have been a loss of £1.4 million. This figure is unaudited and has been prepared for illustrative purposes only. Following Completion, the Board will seek to restore the Continuing Group to profitability in the medium term through investment in both its Sport and Education divisions and management of central costs. On a proforma basis, to illustrate the effect on the net cash position of the Continuing Group had Completion occurred on 31 May 2015 and, thereby, included the £12.2 million net proceeds receivable by SBG from the Sale, the Continuing Group would have had gross cash of £12.4 million and net cash of £12.2 million. These figures are unaudited and have been prepared for illustrative purposes only. 4. Use of proceeds It is expected that the net cash proceeds receivable by SBG on Completion will be £12.2 million. The Board believes that the Company’s existing operations in Sport and Education remain valuable and that the Continuing Group would benefit from further investment into these divisions. However, the Board is mindful that the Continuing Group’s proforma net cash balance following Completion may be in excess of the Company’s expected capital requirements for the foreseeable future. The Board therefore is currently giving consideration to making a capital return to Shareholders, but this remains subject to further analysis of the Continuing Group’s cash requirements and further growth opportunities, as well as the structure of any such distribution. The Board has commenced discussions with its advisers to explore ways by which this can be achieved most effectively and efficiently for Shareholders and will provide an update in due course. In the event of a distribution to Shareholders, the Company’s remuneration committee may consider amending the terms of the Company’s share option schemes. Shareholders and potential investors should note that a potential distribution may or may not occur, and accordingly are advised to exercise caution when dealing in the Ordinary Shares. 5. Current trading and prospects Current trading for the Existing Group for the year to 30 November 2015 is in line with the Board’s expectations. The Gaming Interests have exceeded the Board’s expectations and central costs have been lower than anticipated. In the Education business, the conferences in particular have had a more difficult year and profits will be below the Board’s expectations. The Sport and Health businesses are likely to be in line with expectations.

6. Information on Clarion Clarion is a global events business with a portfolio of event and media businesses across a range of vertical markets. 7. Summary of the Sale Agreement Pursuant to the Sale Agreement, the Company and Mr Caselli have agreed to sell 826,100 iGB Shares in aggregate, representing 75.1 per cent. of the issued iGB Shares for a total gross cash consideration of £14.8 million on a cash free debt free basis payable on Completion. The gross consideration of £14.8 million will be adjusted by the amount of Net Debt and Net Working Capital. The Company has also agreed to enter into a transitional services agreement pursuant to which it has agreed to allow the employees engaged in the business of iGB to continue to work at its premises and to provide certain IT services, office services and website services, which will be charged at cost. The obligations on the Company under this agreement will terminate on 30 April 2016 at the latest. Completion is conditional upon approval by Shareholders of the Sale at the General Meeting and completion by SBG of the Transfer Documents. Shareholders should note that completion of the Transfer Documents is within the control of the Company. Clarion may terminate the Sale Agreement in certain circumstances. A summary of the principal terms of the Sale Agreement is set out below. 8. Related party transaction Trillium Partners, which has acted as the Company’s financial adviser in relation to the Sale, is a specialist media advisory firm, in which voting control of 50.0 per cent. is held by Stephen Routledge, a non-executive Director of the Company, and as such is a related party. Accordingly, the Independent Directors consider, having consulted with Panmure Gordon, its nominated adviser, that the fees of £0.5 million payable to Trillium Partners in relation to the Sale are fair and reasonable insofar as the Shareholders are concerned. 9. Irrevocable undertakings The Company has received irrevocable undertakings to vote in favour of the Resolution from Shareholders representing approximately 71.22 per cent. of the Company’s Existing Shares. 10. Directors’ recommendation The Independent Directors believe that the Sale is in the best interests of the Company and Shareholders as a whole and unanimously recommend the Shareholders vote in favour of the Resolution as they intend to do in respect of their own beneficial holdings amounting, in aggregate, to 19,850,275 Ordinary Shares, representing approximately 4.87 per cent. of the Existing Shares.

Summary of the principal terms and conditions of the Sale Agreement The Sellers have agreed to sell, and Clarion has agreed to purchase, 826,100 iGB Shares, representing 75.1 per cent. of the issued iGB Shares, pursuant to the Sale Agreement. The key terms of the Sale Agreement are as follows: Consideration The Sellers and Clarion have agreed a price of £14.8 million for the Sale Shares, on a cash free debt free basis. The consideration is subject to adjustment following the agreement or determination of the completion balance sheet of iGB and its Subsidiary, iGaming Business North America Inc., as at Completion to determine Net Debt and Net Working Capital. The Completion Accounts are to be prepared by the Sellers no later than 30 days after Completion. After that review has been completed, the Sellers will deliver the completion balance sheet and related documents to Clarion for review and agreement or determination. Based on the parties’ estimate of Net Debt and Net Working Capital, Clarion will pay £15.7 million in aggregate to the Sellers on Completion. There will then be a balancing payment following agreement of the Completion Accounts. Condition Completion is conditional upon the passing of the Resolution by the Shareholders and completion of the Transfer Documents. Conduct Covenants The Sellers have agreed not to carry out certain actions in relation to iGB (“Conduct Covenants”) in the period between the date of the Sale Agreement and Completion without the consent of Clarion. Warranties, Indemnities, Tax Covenant The Sellers have given certain warranties in relation to iGB and iGaming Business North America Inc., which are usual for this type of transaction, other than in relation to tax and accounts, which only SBG is giving. The Sale Agreement also contains a tax covenant in favour of Clarion which includes customary provisions relating to the tax affairs of iGB and its Subsidiary as at Completion. The warranties and the tax covenant are given on a several basis by the Sellers. Clarion is taking out warranty and indemnity insurance to cover certain liabilities under the warranties and the tax covenant to the extent the liability exceeds £1 million. There are, however, a number of warranties and tax covenant indemnities that are not covered by the insurance. If a warranty or tax covenant claim is covered by the insurance policy, then SBG’s liability is capped at £700,000, save in the case of warranties relating to title to the Sale Shares and the IPR Assignment (“Fundamental Warranties”) and certain indemnities, where liability is capped at the total purchase price. If a warranty or tax covenant claim is not covered by insurance, then SBG’s liability is capped at £10.4 million save as referred to above in relation to the Fundamental Warranties where liability is capped at the total purchase price.

Claims for breach of warranties must be brought within two years of Completion and claims for breach of tax warranty or the tax covenant must be brought within seven years of Completion. Right to Terminate Clarion is entitled to terminate the Sale Agreement if there is any breach of the Fundamental Warranties or a Conduct Covenant which is either fundamental or which is likely to have a material adverse effect on iGB. Non-Compete The Company has given covenants to Clarion not to compete with the business of the Company or the conference known as iGaming Business North America or to solicit customers or certain employees of iGB for the period of three years from Completion, save in relation to non-key employees in which case the restriction lasts for two years. Transitional Services Under the Sale Agreement, the Company and SBG are to enter into an agreement with iGB whereby the Company and SBG will provide certain transitional services to iGB for a period following Completion. Governing Law The Sale Agreement is governed by English law.

DEFINITIONS

The following definitions apply throughout this document unless the context requires otherwise:

“Adjusted EBITDA”

EBITDA adjusted for restructuring and acquisition-related credits and costs, and share-based payment costs, as well as the tax impact of those adjusting items and any non-cash tax credits and charges

“Affiliate Contract”

the agreement between Affiliate Media and iGB dated 2 July 2009 setting out the terms of the joint venture relating to gaming affiliates in relation to which Affiliate Media assigned its rights to SBG in January 2011

“Affiliate Media”

Affiliate Media Inc. of 32 Discovery Suite, Irvine CA, 92618, United States of America

“AIM”

the AIM market operated by the London Stock Exchange

“AIM Rules”

the AIM Rules for Companies published by the London Stock Exchange from time to time

“Board” or “Directors”

the board of directors of the Company

“Completion”

completion of the Sale on the terms set out in the Sale Agreement

“Continuing Group”

the Company and its subsidiaries but excluding the Gaming Interests, Radcliffe Solutions Limited and Radcliffe Publishing Limited

“EBITDA”

earnings before interest, tax, depreciation and amortisation of goodwill and intangible assets

“Existing Group”

the Company and its Subsidiaries (including iGB)

“Existing Shares”

the 407,590,795 Ordinary Shares in issue at the date of this announcement

“Gaming Interests”

the gaming interests of the Company comprising a 70 per cent. indirect shareholding in iGaming Business Limited and SBG’s interest in the Affiliate Contract

“General Meeting”

the general meeting of the Company to be convened in the circular to Shareholders

“iGaming Business Limited” or “iGB”

iGaming Business Limited, a 70 per cent. owned Subsidiary of the Company and the subject of the proposed Sale

“iGB Group”

iGB and its Subsidiary

“iGB Shares”

Ordinary shares of 0.01 pence each in the capital of iGB

“Independent Directors”

the Directors other than Stephen Routledge, who may be conflicted by reason of his interest in Trillium Partners

“IPR Assignment”

the agreement between the Company, the Sellers and iGB (amongst others) pursuant to which the Company and the Sellers agree to transfer to iGB all international property rights they hold that are used by iGB

“Net Debt”

the amount by which indebtedness of the iGB Group exceeds or is less than its cash balances

“Net Working Capital”

the amount by which working capital of the iGB Group exceeds or is less than £zero

“Ordinary Shares”

ordinary shares of 1 pence each in the capital of the Company

“Panmure Gordon”

Panmure Gordon (UK) Limited, the Company’s nominated adviser and broker, which is incorporated in England and Wales with the registered number 4915201

“Resolution”

the resolution to be proposed at the General Meeting and set out in the circular to Shareholders

“Sale”

the proposed sale by SBG of its 70 per cent. shareholding in its Subsidiary, iGB, to Clarion pursuant to the Sale Agreement

“Sale Agreement”

the conditional sale agreement dated 17 December 2015 between SBG, Mr Caselli and Clarion

“Sale Shares”

the 826,100 iGB Shares to be sold by the Sellers to Clarion pursuant to the Sale Agreement

“SBG”

SBG Companies Limited, a Subsidiary of the Company

“Sellers”

SBG (which holds 70 per cent. of the issued share capital in iGB) and Michael Caselli (who holds 30 per cent. of the issued share capital in iGB)

“Shareholder”

a holder of Ordinary Shares

“Subsidiary”

has the meaning given to it in section 1159 of the Companies Act 2006

“Transaction”

the proposed sale of the Sale Shares (representing 75.1 per cent. of the issued iGB Shares) by SBG and Michael Caselli to Clarion pursuant to the Sale Agreement

“Transfer Documents”

the IPR Assignment and a document entitled “Termination

of Outsourcing” which will, on Completion, have the effect of transferring certain employees of the Company, who currently provide services to iGB, to iGB “Trillium Partners”

Trillium Partners Limited