CEC Creative Educ

RNS Number:5249B
Creative Education Corp Plc
03 August 2004

3 August 2004

                       Creative Education Corporation PLC

                  Acquisition of Happy House Educational Care


Creative Education Corporation PLC ("CEC"), the AIM quoted provider of nursery
school facilities, announces that on 30 July 2004 it exchanged contracts to
acquire the business and assets with certain liabilities of the partnership,
trading as Happy House Educational Care ("HHEC") from the vendors, Bruce and
Linda Tranter.  Completion of the acquisition is expected to take place on 29
October 2004 and is conditional on written consents, orders, clearances,
authorisations or exemptions under and in respect of landlords' consent to
assign the properties and re-registration with OFSTED being obtained.

HHEC operates four nurseries as below with a total of 205 places:

          Trading Name                               Location
          Little Red House                           Crowthorne, Berkshire
          Happy House Day Nursery                    Reading, Berkshire
          Little Ducklings Day Nursery               Woodley, Berkshire
          Little Miss Muffet Nursery                 Basingstoke, Hampshire

Little Red House and Happy House Day Nursery operate from freehold properties
which will be purchased by Conduit Square Limited ("Conduit") and leased back to
CEC as set out below. Little Miss Muffet Nursery operates from premises held on
a 20 year lease with 18 years to run and the lease on Little Ducklings Day
Nursery's premises is currently in the course of renewal.

HHEC commenced trading in July 1997 and each nursery has established a sound
reputation in their local area with occupancy currently at 87 per cent. based on
full time equivalent nursery places being filled.

The last partnership accounts of HHEC to March 2003, adjusted for the
elimination of purchased goodwill and for the disposal of the freehold
properties occupied by Little Red House and Happy House Day Nursery with the
substitution of the appropriate leasehold terms as detailed below, showed losses
of #11,891 on turnover of #1,359,185.

The net liabilities of HHEC being acquired by CEC, based on the partnership
accounts to March 2003, adjusted for the elimination of purchased goodwill and
the disposal of the freeholds of Little Red House and Happy House Day Nursery,
were #28,490.

The net consideration payable by CEC, taking into account the purchase of the
freeholds of Little Red House and Happy House Day Nursery for #1,850,000 by
Conduit as set out below, is #657,500 to be adjusted for net assets or
liabilities at completion as set out in the asset purchase agreement of which
#557,500 is in cash and #100,000 in new ordinary shares in CEC to be allotted
and issued credited as fully paid, such number of consideration shares being
calculated based on the average price of the middle market listings for the
seven dealing days up to and including the third dealing day prior to
completion.  Application will be made for the consideration shares to be
admitted to trading on AIM with effect from 6 August 2004. The consideration
shares will rank pari passu in all respects with the existing ordinary shares in
CEC.

In order to facilitate the acquisition of HHEC the asset purchase agreement
contains a provision that CEC can require Conduit to acquire the freehold
properties occupied by the Little Red House and Happy House Day Nursery
operations. CEC has given notice that it requires Conduit to complete the
purchases of the freeholds in question in the sum of #1,850,000 of which
#1,593,679 will go to the vendors and #256,321 to CEC. Leases will be created at
completion in favour of CEC for a period of 30 years, with reviews every 5
years, on a fully repairing and insuring basis, at initial annual rents of
#165,000 for Little Red House and #55,000 for Happy House Day Nursery.

Conduit is a company owned by Laurence Davis and John Baker who are directors
of, and shareholders in, CEC. The obligations of Conduit have been guaranteed by
Mr Davis and Mr Baker personally. The directors currently believe that no
authorities under S320 Companies Act 1985 are required in respect of the
granting of the leases by Conduit but if such authorities are required they will
be sought from shareholders in general meeting.

The acquisition of the freeholds of Little Red House and Happy House Day
Nursery, and the granting of the new leases, by Conduit is a related party
transaction (as defined) under the AIM rules. The directors of CEC, other than
Laurence Davis and John Baker, having consulted with Corporate Synergy PLC,
believe that the terms of the transaction whereby Conduit acquire the freeholds
occupied by Little Red House and Happy House Day Nursery and then lease the same
to CEC, as enlarged by the acquisition of HHEC, are fair and reasonable insofar
as its shareholders are concerned.

Following the acquisition CEC will be able to offer a total of 608 full time
equivalent nursery places from 16 nurseries in total with a geographical spread
ranging from Hampshire to Bedfordshire and Berkshire to Essex.

Contacts:

David Alexander - 020 8864 5147
Creative Education Corporation


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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