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XYX/QRC Overview Chancellor University WIKI

XYX/QRC Overview Chancellor University WIKI. Agenda. Overview Transaction NEWCO Overview Business Segments Summary. Welcome. We are excited to have you here Great opportunity ahead of us Deal makes sense Diversify product and channel portfolio Significant synergies

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XYX/QRC Overview Chancellor University WIKI

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  1. XYX/QRC Overview Chancellor University WIKI

  2. Agenda Overview • Transaction • NEWCO Overview • Business Segments • Summary

  3. Welcome • We are excited to have you here • Great opportunity ahead of us • Deal makes sense • Diversify product and channel portfolio • Significant synergies • Solid growth opportunity • Execution will be key to success!

  4. Introduction • NEWCO will be a newly formed Company that incorporates the former businesses of XYZ and QRC to create one of the leading supplemental educational publishing companies. • The underlying businesses of both XYZ and QRC reflect in excess of xx years of operations in the supplemental publishing markets, maintaining strong brand recognition and a leading distribution channel presence. • The business targets educators and families, principally in North America, through the K-6 education market (dealer stores, direct to teacher, direct to schools), the trade market (mass, trade, club, office and specialty channels) and the pre-school market (schools, daycares, child development centers, Head Starts). • The combined Company specializes in the publishing and distribution of education resources that enhance classroom learning for children and their educators, and fosters continued child development in the home for children and their caregivers. • This powerful combination creates a highly profitable organization with strong free cash flow, having market leading brands with teachers and parents, a well diversified suite of products and product development capabilities, and strong market position in each of the core channels of distribution.

  5. NEWCO Overview Combination creates one of the largest independent supplemental educational publishers in North America with an impressive stable of proprietary brands, a strong balance of product offerings and product development capabilities, and a well entrenched and diversified distribution footprint. 1 • Significant cost synergies between two businesses identified, totalling ~$xxx • Opportunity to leverage core competencies and skills sets • Potential to better leverage our infrastructure for future growth Significant cost synergies and cash flow improvement 2 2 2 • Broadens the revenue streams – creating balance of Trade, Education and Pre-School • Creates a better revenue balance between decoratives, teacher resources and content • Provides further highly recognizable educational brands for both dealer and trade markets as well as a larger content library Diversifies revenue sources 3 • Businesses have targeted different channels, creating potential for enhanced cross-selling, including additional revenues • Potential for additional revenue from dealers who did not want to transact with SSP due to relationship with parent (a competitor to the channel) Enhanced distribution platform

  6. Business Highlights • Strong foundation in core brands • Educator - XXXXYYYYZZZZ • Trade –QQQRRRCCC • Balanced revenue between education and mass/trade markets • Balanced product base between education and mass/trade products as well as books, teacher resources, among others. • Scalable business model • Opportunities to increase market share • Positive trending long term industry fundamentals due to government funding • Strong and experienced team

  7. Business Overview NEWCO post transaction, is a leading publisher of supplemental educational materials for the Educator, Trade and Pre-School market targeting educators and families having/teaching children in the ranges of pre-school through to grade 6. A summary of the business segments are as outlined below:

  8. Channel / Product / Brands NEWCO Highlights Education Product Trade/Mass Product Pre School Curriculum • 2012 Revenue : $ xxxx • Top supplemental education publishing brands to the dealer market and schools • #1 supplier to educational dealer channel • Strong product category positions: • #1 in… • #1 in … • One of the leader’s in workbooks • Sales primarily across North America, • Primary strength is in K-6 age range • 2012 Revenue: $ xxxx • Top supplemental education publisher to the trade, mass, office and club market • Strong product category positions: • QRC • Strong presence in all leading bookstores, clubs, office stores, and mass • 20102 Revenue: $ xxx • One of leading brands in highly-fragmented outsourced pre-school curricula market • QRC and XYZ Key Brands Key Brands Key Brands

  9. Summary • Great opportunity to combine these two companies • Diversify product and channel portfolio • Cost savings and synergies • Solid profit contribution and cash flow • Execution will be key to success!! • 1+1= 3!! • It’s up to us!!!

  10. Questions and General Discussion

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