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Placement spells good news for Riverdeep
Tuesday, August 28 2001
by Kevin O' Brady


Irish e-learning company Riverdeep has announced the placing of 12 million
ordinary shares, representing a total value of USD42 million.



 







The shares were valued at EUR3.87 each at the time of the placement, equivalent
to USD21 per American Depositary Share, and were released to global institutional
investors. 





The placement reduces IBM's holding in Riverdeep from 14 percent to seven
percent, according to Ellie McCormack, director of public relations for
Riverdeep. 





Following the placement, Riverdeep also announced that its main insider
shareholders -- IBM, Riverdeep CEO Barry O'Callaghan and Patrick McDonagh -- had
signed new 12-month lock-up agreements on their combined holdings. These
agreements will not expire before August 2002, meaning that it is unlikely that
any significant secondary stock will be placed on the market within the next 12
months. 





IBM, O'Callaghan and McDonagh have a combined holding of 35 percent in Riverdeep
following the share placement, said McCormack. 





The share placement follows Riverdeep's announcement earlier this month that its
revenues for the quarter ending 30 June 2001 were up and that the company had
achieved profitability ahead of schedule. 





Bernie Lardner, an analyst with Davy Stockbrokers in Dublin, said that the share
placement is a "strong plus" for Riverdeep. 





"It removes concerns about Riverdeep's stock hangover, and it allows Riverdeep
to concentrate on its fundamentals," said Lardner. "Riverdeep is still very
cheap, it has a relatively fixed customer base, and it has produced very strong
results," she added. 





"Its business is going very well," she explained. "Its expectations for
achieving profitability were for December 2001, so it is six months ahead of
expectations." Furthermore, Riverdeep has a strong distribution agreement with
IBM, and it is on schedule with its business targets, she added. 





Meanwhile, O'Callaghan said that Riverdeep would continue to acquire companies
and grow 100 percent every year. 





Riverdeep and IBM jointly promote, market, sell and service each other's content
offerings as complementary K-12 learning solutions to local US school districts,
state education departments and international ministries of education through
their strategic alliance. 





Riverdeep was founded in 1995 and has joint headquarters in Dublin and Cambridge,
Massachusetts. 



At 12:01 EST in New York on Tuesday, Riverdeep was up over seven percent, trading
at USD24.33. 





Riverdeep is at http://www.riverdeep.net.