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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACTS:
Xxxx Xxxxx
XxxxXxx International, Inc.
617/494-5816
Xxxxxx X. Xxxxxxxx
MECC
612/569-1513
Xxxxx Xxxxx/Xxxxx Xxxxxxx
Xxxxxxxxx XxxXxxxxx Xxxxxxx
212/371-5999
SOFTKEY INTERNATIONAL AND MINNESOTA EDUCATIONAL COMPUTING CORP.
ANNOUNCE MERGER AGREEMENT
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CAMBRIDGE, MASS (October 30, 1995) -- SoftKey International Inc. (NASDAQ: SKEY;
Toronto Stock Exchange: SSK) and Minnesota Educational Computing Corporation
(MECC) (NASDAQ: MECC) today announced they have entered into a definitive
merger agreement in which SoftKey will acquire MECC, a publisher and
distributor of high-quality educational software for children, in a tax-free,
stock-for-stock transaction valued at a total of approximately $370 million.
The transaction, which has been unanimously approved by both Boards of
Directors, will be accounted for on a purchase accounting basis and is expected
to be accretive to SoftKey on an operating cash flow per share basis.
In the proposed transaction, each outstanding share of MECC common stock will
be exchanged for $40.00 of SoftKey common stock as long as the volume-weighted
average price for SoftKey for the 20 trading days three trading days prior to
closing is between $35.00 and $45.00. The exchange ratio is fixed below $35.00
and above $45.00. Using Friday, October 27, 1995, close of market prices for
MECC and SoftKey, the exchange ratio would be 1.049 shares of SoftKey for each
share of MECC.
Xxxxxxx Xxxxx, XxxxXxx's Chief Executive Officer said, "MECC is a leading
developer in the educational software market with over 190 titles such as
Oregon Trail II. It will be a great asset for SoftKey. SoftKey's extensive
distribution in the retail, direct mail, international and OEM markets will
allow us to increase significantly MECC's share in the home education market.
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Xxxxx X'Xxxxx, XxxxXxx's President, said, "There is no overlap in the MECC
product mix with SoftKey's. This further enhances SoftKey's shelf space in
retail with proprietary brand name educational titles in math, social studies,
language arts and science. Also, MECC's 22 year old franchise in the creation
of educational software for schools provides SoftKey with proven development
talent in the educational market. We will be applying our proven strategy of
brand line extension, so that we can provide great educational software at great
prices for all people."
Xxxx X. XxXxxxx, MECC's President/CEO, said, "This merger provides MECC with
very significant opportunities to leverage its position in both the school and
home educational software markets. MECC's outstanding products have been well
received in both markets and they will benefit greatly from SoftKey's powerful
distribution. The combination of SoftKey's powerful and effective retail
distribution and MECC's well-established direct-to-school distribution will
establish a new and improved model for the educational software industry."
Xxxxxxx X. Xxxxxx, Chairman of the Board of MECC, and President and Principal
of North American Business Development Company, L.L.C., the general partner of
North American Fund II, L.P., reported that North American Fund II, L.P. has
agreed to vote 9.9% of the outstanding stock of MECC in favor of the merger.
Both Xx. Xxxxxx and Xx. XxXxxxx will join SoftKey's Board of Directors.
The transaction is subject to certain conditions, including stockholder
approvals, the effectiveness of a registration statement under federal
securities laws relating to the SoftKey common stock to be issued in the
merger, and the expiration of applicable waiting periods under pre-merger
notification regulations.
Bear, Xxxxxxx & Co. Inc. is acting as financial advisor to SoftKey. Xxxxx &
Company Incorporated is acting as financial advisor to MECC.
Minnesota Educational Computing Corporation publishes and distributes a number
of retail software titles including The Oregon Trail, Word Munchers, Number
Munchers and Storybook Xxxxxx. MECC's software content is concentrated on math
and problem solving, language arts and reading, writing and creativity, social
studies and history, and science and interdisciplinary products.
SoftKey International Inc. is ranked as one of the world's largest consumer
software publishers by the 1995 Soft-Letter 100. SoftKey develops, publishes
and markets over 300 consumer software titles targeted at the home user in the
productivity, 'edutainment' and lifestyle categories in North America and
distributes additional products internationally. SoftKey's products are sold
in more than 19,000 stores in more than 40 countries in the retail, direct mail
and OEM sales channels.
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SoftKey's products offerings include popular titles such as Calendar Creator
Plus(TM), BodyWorks(TM) 4.0, The American Heritage(R) Talking Dictionary,
SPORTS ILLUSTRATED Swimsuit Calendar, Infopedia(TM), KeyCAD Complete(TM),
Xxxxx'x Medical Encyclopedia, Time Almanac and the Platinum(TM) jewel case,
KeyKids(TM) and PowerPak(TM) lines.
The shares of SoftKey common stock will be offered to MECC stockholders only
through a prospectus forming part of a registration statement which will be
filed with the Securities and Exchange Commission.
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SoftKey International Inc. is ranked as one of the world's largest consumer
software publishers by the 1995 Soft-Letter 100. SoftKey develops, publishes
and markets over 300 consumer software titles targeted at the home user in the
edutainment, lifestyle and productivity categories in North America and
distributes additional products internationally. SoftKey's product offerings
include popular titles such as Calendar Creator Plus(TM), BodyWorks(TM) 4.0,
The American Heritage(R) Talking Dictionary, SPORTS ILLUSTRATED Swimsuit
Calendar, Infopedia(TM), KeyCAD Complete(TM), Xxxxx'x Medical Encyclopedia,
Time Almanac and the Platinum(TM) jewel case, KeyKids(TM) and PowerPak(TM)
lines.
The participants in the planned proxy solicitation will include
XxxxXxx and the following directors and executive officers of XxxxXxx:
Xxxxxxx X. Xxxx (Director), Xxxxxx Xxxxxx (Director), Xxxxx X'Xxxxx
(Director, President), Xxxxxxx X. Xxxxx (Chairman of the Board, Chief
Executive Officer), Xxxxxx Xxxxxxxx (Director), Xxxxx X. Xxxxxxxx
(Director) and X. Xxxxx Xxxxxx (Chief Financial Officer). SoftKey is
the beneficial owner of 100 shares of the common stock of The
Learning Company purchased on August 9, 1995 for $56.50 per share in
open market transactions executed on the NASDAQ National Market
System and of 17,500 shares of the common stock of The Learning
Company purchased on October 27, 1995, for an average weighted price
of $55.48 per share in an open market transaction executed on the
NASDAQ National Market System. No directors or executive officers of
SoftKey own any shares of The Learning Company common stock.
Certain other representatives of SoftKey who may become participants
are: Xxxx Xxxxx (Consultant), Xxxxxxx X. Xxxxxxx (Xxxx Xxxxxxx,
Senior Managing Director), Xxxxxx X. Xxxxxxx (Xxxx Xxxxxxx, Associate
Director), Xxxxx X. Xxxx (Bear Xxxxxxx, Associate). None of such
individuals own any shares of The Learning Company common stock. In
the normal course of its business, Bear, Xxxxxxx, & Co. Inc. may trade
the debt and equity securities of The Learning Company for its own
account and the account of its customers and, accordingly, may at any
time hold a long or short position in such securities. As of October
27, 1995, Bear, Xxxxxxx, & Co. Inc. held a net long position of
172,682 shares of The Learning Company common stock, and had
discretionary authority over accounts with 17,462 shares of The
Learning Company common stock (of which 886 shares were held in
benefit plans for the benefit of Bear, Xxxxxxx, & Co. Inc. employees).
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