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The Learning Company, Inc. Acquires Sofsource, Inc., A Leading Educational Software Publisher

CAMBRIDGE, Mass., June 3 /PRNewswire/ -- The Learning Company, Inc. (NYSE: TLC) announced today that it has entered into a definitive agreement with North Coast Entertainment, Inc., a wholly owned subsidiary of Handleman Company, to acquire all of the capital stock of Sofsource, Inc., a leading publisher of educational and test software for high school and college students.

The Learning Company has agreed to acquire Sofsource for a purchase price of approximately $45 million, which will be satisfied by the issuance of 1,641,138 shares of common stock. The closing of the transaction is subject to certain conditions, including expiration of applicable waiting periods under pre-merger notification regulations.

Sofsource had revenues of approximately $22 million in its most recent year ended May 2, 1998. Sofsource is the publisher and developer of many of America's most popular high school and college educational software titles for consumers and schools in the teen to adult market. Among the portfolio of popular titles sold under the Pro One and Sofsource brands are the following products:
 Mathematics Spanish Box Set
 Middle School LRL English Box Set
 Mathematics Premium Edition Middle School Language Arts
 High School LRL Complete Algebra
 Middle School Math Box Set High School Grammar
 Pro One Algebra Treasure Hunt Math
 For Credit Trigonometry For Credit Pre-Calculus
 Analytic Geometry Multimedia French
 Science MBA Box Set

Michael Perik, Chairman and Chief Executive Officer of The Learning Company, said, "We are very impressed with the achievements and the sales momentum that the Sofsource team has achieved in the mathematics and testing categories. Recently, Sofsource has been gaining momentum in its U.S. retail market share in terms of dollar revenues and, according to PC Data, most recently has in excess of 4% share in the educational software category. We expect that this acquisition will be at least $.02 per share accretive to fiscal 1998 earnings and at least $.04 accretive to fiscal 1999 earnings for The Learning Company."

Kevin O'Leary, President of The Learning Company said, "Sofsource brings leading brands and technology in the high school mathematics, test and college preparation markets. Enhancing our presence in these important growing categories was one of our primary strategic goals for fiscal 1998. The addition of the Sofsource line of products to our existing product mix will allow us to offer a full range of quality education products to all of our customers in the school and home markets for sale throughout our wide channel base in retail, direct response, school, OEM and international markets."

This release contains information forecasting the results of the company after the acquisition of Sofsource, which are "forward-looking statements" under the federal securities laws. Actual results could differ materially from those forecasts and there can be no assurance that results will be achieved. Important factors that could cause actual results to differ materially from those presently estimated include: the company's ability to predict the revenues and profit it will generate from the sale of the Sofsource product line; the effects of general economic conditions; and the ability to achieve economics of scale and revenue growth from the acquisition.

The Learning Company, Inc. develops and markets a family of premium software brands that educate across every age from young children to adults. The company's products are sold in over 23,000 retail stores in North America and through multiple distribution channels including school, on-line, direct response and OEM. The company also develops, publishes and distributes products through international markets in France, Germany, the United Kingdom, Holland and the Pacific Rim. The Learning Company, Inc. is headquartered at One Athenaeum Street, Cambridge, MA, 02142, telephone 617-494-1200, fax 617-494-1219.

SOURCE The Learning Company, Inc.
 -0- 06/03/98

/CONTACT: R. Scott Murray, Executive Vice President and Chief Financial Officer, 617-494-5861, or, or John Suske, Investor Relations, 617-494-5816, or, or Susan Getgood, Press Relations, 617-494-5674, or, all of The Learning Company/


CO: The Learning Company, Inc.; North Coast Entertainment, Inc.;

Handleman Company; Sofsource, Inc. ST: Massachusetts IN: CPR EDU SU: TNM

JF-LB -- HSW025 -- 8525 06/03/98 08:31 EDT
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Publication:PR Newswire
Date:Jun 3, 1998
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