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Transaction valued at approximately $15 million

OAKLAND, Calif. & PITTSBURGH–(BUSINESS WIRE)–Scientific Learning Corporation (OTC PINK:SCIL) (“Scientific Learning”), the leader in evidence-based online reading and language software, announced today that it has been acquired by an affiliate of Carnegie Learning, Inc. (“Carnegie Learning”), a leader in artificial intelligence for education and formative assessment, in an all-cash merger transaction valued at approximately $15 million. The combination will strengthen the education technology portfolio of both entities to further drive forward their joint mission of improving student learning outcomes through leading-edge technology built from and validated by rigorous research.

Under the terms of the agreement, Carnegie Learning acquired all of the outstanding shares of Scientific Learning common stock for a cash payment of $0.53 per share. After applying a portion of the transaction value to items noted below, the estimated total per share consideration to be received by Scientific Learning’s securityholders is approximately $0.25, which comprises a closing merger consideration of approximately $0.16 per share and an estimated additional merger consideration of approximately $0.09 per share, on a fully diluted basis. The transaction was unanimously approved by Scientific Learning’s Board of Directors, by a majority of Scientific Learning’s stockholders via written consent, and by the Board of Directors of Carnegie Learning. Scientific Learning is now a privately-owned subsidiary of Carnegie Learning and will no longer be listed on the OTC Markets.

Jeff Thomas, CEO of Scientific Learning, stated, “Through our combination with Carnegie Learning, we are pleased to deliver value to our shareholders while aligning our company with a highly complementary organization that approaches cutting-edge research and technology solutions for K-12 students with a like-minded mission-driven approach. By leveraging Carnegie Learning’s innovative technology platform, Scientific Learning will have an enhanced ability to accelerate its product development and further expand its mission of helping learners realize their full potential.”

Carnegie Learning’s award-winning adaptive personalized learning software, blended learning solutions, and professional learning services have long supported teachers and students nationwide. In today’s challenging environment, Carnegie Learning’s blended offerings are proving highly effective, particularly as schools continue to operate in a hybrid and remote learning environment. Scientific Learning’s offerings complement Carnegie Learning’s portfolio of research-based offerings that offer educators leading edge instructional software and advanced data-driven insights.

Barry Malkin, CEO of Carnegie Learning, added, “Now more than ever, students need access to adaptive personalized learning offerings. Scientific Learning’s product portfolio and long history of delivering neuroscience-based ed tech solutions directly to students around the world supports Carnegie Learning’s mission to promote student success. We are excited to partner with the Scientific Learning team and, together, continue to redefine and advance the role of technology in K-12 education.”

A portion of the transaction value was applied to fund Scientific Learning’s approximately $7.0 million in subordinated debt, other debt and certain selling and transaction-related expenses. Another portion of the transaction value has been placed in escrow to be released upon satisfaction of certain conditions and following a customary working capital adjustment period in accordance with the terms and conditions of the agreement.

About Scientific Learning

Scientific Learning is a leading SaaS education company that delivers neuroscience-based educational technologies. Scientific Learning’s programs have been used by more than three million learners in more than 2,300 K-12 schools in the United States and Canada, almost 300 private practice clinicians, thousands of students via a direct-to-consumer channel, and in over 55 countries via value-added resellers. The company’s Fast ForWord® programs cross-train foundational language and cognitive skills necessary for rapid English language development. Reading Assistant Plus™ uses speech verification technology to provide real-time corrective feedback to students as they read and speak, in a manner similar to that of an individualized language and reading coach. For more information please visit: https://www.scilearn.com

About Carnegie Learning, Inc.

Carnegie Learning is the leader in artificial intelligence in education and formative assessment. Born from more than 20 years of learning science research at Carnegie Mellon University, Carnegie Learning delivers powerful math, ELA and world language blended learning solutions, the award-winning MATHia® platform for grades 6-12, project-based digital solutions for computer science, and best-in-class K-12 professional learning services. For more information please visit: www.carnegielearning.com.

Scientific Learning was advised by Cherry Tree & Associates, LLC, an investment banking firm specializing in serving education technology companies. Loeb & Loeb LLP served as Scientific Learning’s legal counsel.

Safe Harbor Statement: The information posted in this release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words “may,” “will,” “should,” “plans,” “explores,” “expects,” “anticipates,” “continue,” “estimate,” “project,” “intend,” and similar expressions. The forward-looking statements in this release include, among others, statements regarding the estimated total per share consideration to be received by Scientific Learning’s securityholders. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Factors which could cause results or events to differ from current expectations include, among other things: the extent to which the SBA forgives Scientific Learning’s CARES Act PPP loan; the outcome of any legal proceedings that may be instituted against Scientific Learning related to the merger or the merger agreement; and the amount of the costs, fees, expenses and other charges related to the merger. Although Scientific Learning believes that the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, neither Scientific Learning nor Carnegie Learning assumes any obligation to update or revise any forward-looking statements.

Contacts

Scientific Learning

Amy Takabori – Brand and Content Manager

[email protected]
520-282-6245

Carnegie Learning

April Boland – Director of Content Marketing

[email protected]
412-676-6633

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