SALT LAKE CITY, Nov. 13 /PRNewswire/ -- Franklin Covey (NYSE: FC), a
leading global learning and performance solutions firm, today announced the
sale of its wholly owned subsidiary, Premier, located in Bellingham,
Washington, to School Specialty (Nasdaq: SCHS) for $152.5 million as part of
an overall re-capitalization of the Company. The Company also announced that
it anticipates using a portion of the proceeds for a planned tender offer for
8 million shares of its outstanding common stock at $5.50 per share, an
81% premium over the previous 30 days' average closing price.
School Specialty is the largest direct marketer of supplemental
educational supplies to schools and teachers for pre-kindergarten through
twelfth grade. In addition to the sales price of $152.5 million, Franklin
Covey will retain working capital of approximately $13 million. The
transaction is subject to Hart Scott Rodino clearance and other customary
closing conditions.
The Company's tender offer for its common stock is expected to open as
soon as practicable and is subject to the closing of the Premier transaction,
which is expected by December 15, 2001, and other customary regulatory
reviews.
Bob Whitman, chairman and chief executive officer of Franklin Covey said,
"While Premier has been a successful and profitable division for the Company,
the proceeds of this sale will allow us to further focus our resources and
efforts on strengthening the historical core businesses of Franklin Covey:
providing training and tools to individuals and organizations. This
transaction, combined with the more than $30 million of cost reductions
already implemented and $15 million of cost reductions planned over the next
several months, will allow us to transform the overall capital and cost
structure of the Company. Specifically, this transaction positions us to pay-
off all of the Company's debt, increase our cash balances and fund the tender
offer for a substantial portion of the outstanding common shares, with the
potential to dramatically shrink the share base."
Pursuant to a license from Franklin Covey, Premier will continue to expose
over 20 million K-12 students to Franklin Covey's world-renowned 7 Habits
content. In addition, School Specialty will feature select Franklin Covey
products in its catalogs. Franklin Covey will retain the educator leadership
and effectiveness training portion of Premier's business.
Dan Spalding, chairman and chief executive officer of School Specialty
said, "We are very excited about acquiring Premier and the market leading
capabilities it brings to our strong line-up of school products in the K-12
market. Premier has developed the most functional planning tool available to
students in our market. We believe that by leveraging Premier's momentum in
the student planner market, we will continue to expand our overall market
share."
As part of the transaction, nearly 550 Franklin Covey employees in the US
and Canada will transition to School Specialty where they will continue to
serve more than 35,000 schools and more than 20 million students.
This press release is not an offer to purchase nor a solicitation of an
offer to sell shares of Franklin Covey. Holders of common stock are advised
to read the tender offer statement carefully when it becomes available because
it will contain important information about the tender offer. The tender
offer statement and other documents filed by the Company will be available for
free at the website of the Securities and Exchange Commission (http://www.sec.gov) or
from the Company. Shareholders who wish to obtain a copy of the tender offer
statement when it becomes available or other documents filed by the Company
should contact Richard Putnam at the phone number or address listed above.
The offer to purchase shares will not be made to, tenders will not be accepted
from or on behalf of, holders of shares in any jurisdiction in which making or
accepting the offer to purchase would violate that jurisdiction's laws.
About Franklin Covey Co.
Franklin Covey Co. is a leading learning and performance services firm
assisting professionals and organizations in measurably increasing their
effectiveness in leadership, productivity, communication and sales. Clients
include 80 of the Fortune 100, more than three-quarters of the Fortune 500,
thousands of small- and mid-sized businesses, as well as numerous government
entities. Organizations and professionals access Franklin Covey services and
products through consulting services, licensed client facilitators, one-on-one
coaching, public workshops, catalogs, more than 160 retail stores,
http://www.franklincovey.com and http://www.franklinplanner.com . More than 3,500 Franklin
Covey associates provide professional services and products in 44 offices in
38 countries.
Safe-Harbor Statement
This announcement contains forward-looking statements that necessarily are
based on certain assumptions and are subject to certain risks and
uncertainties, including the closing of the transaction with School Specialty.
This transaction is subject to review by the Justice Department under the Hart
Scott Rodino Act and the satisfaction of a number of customary closing
conditions by both parties to the agreement. The Company's proposal to use a
portion of the proceeds to fund a tender offer is subject to the receipt of
such proceeds, the continuing determination by the board of directors that the
proposed tender offer is a beneficial use of such proceeds, and potential
changes in the market price of the Company's common stock. The general
prospects of the Company are subject to the effects of competition, market
acceptance of new products or services, gains or losses in market share,
growth or contraction in the overall market for the Company's products and
other factors identified and discussed in the Company's 2000 10-K and
subsequent 10-Q reports filed with the Securities and Exchange Commission.
There can be no assurance that the Company's actual future performance will
meet management's expectations. These forward-looking statements are based on
management's expectations as of the date hereof, and are based on factors that
may cause future results to differ materially from the Company's current
expectations.
SOURCE Franklin Covey Co.
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Related links:
http://www.franklincovey.com
Company News On-Call:
http://www.prnewswire.com/comp/107086.html
CONTACT:
Richard R. Putnam, Investor Relations of
Franklin Covey, +1-801-975-1776
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