Lagardère: agreement to acquire IEC

Lagardère SCA announces the signature of an agreement to acquire the entire capital of International Events and Communication in Sports (IEC),

a Swedish sports rights specialist founded in 1994. Following the acquisition, IEC will become a wholly-owned subsidiary of Lagardère Sports in order to leverage numerous potential synergies with Sportfive and Newsweb.

IEC’s sports rights management business principally covers tennis, football, volleyball and athletics. The company markets over 225 sporting events in Europe (a region that represents 75% of IEC’s contracts), the USA and Asia, acting primarily as agent but also as rights holder. Drawing on its diverse sports rights portfolio it offers bulk deals encompassing several sporting disciplines, enabling it to provide its clients with a full array of turnkey sport programming solutions.

IEC’s base of 125 clients – of which the 10 largest represent 46% of the company’s sales – mainly comprises television groups from a wide range of geographic regions and which are expected to account for 60% of IEC’s sales for fiscal 2007.

The company has also recently broadened its client base to include new media. It now provides program offerings and other solutions to IPTV operators (such as PCCW in Hong Kong) as well as through broadband services (Betfair in the UK and Setanta in the USA), and HDTV (Indemand in the USA).

At the same time, IEC has developed a sporting event television production and post production offering which provides a comprehensive range of services including host broadcasting, dubbing, editing, and commentary services, as well as additional statistics, television formats and transmission services such as setting up satellite pools. IEC covers substantially all production operations on behalf of its clients. This high-growth business fits smoothly with IEC’s rights management operations by offering tailor-made solutions to both television and new media broadcasters.

IEC generated sales of some €17 million for the fiscal year ended August 31, 2006 (up 40% on fiscal 2005), and EBIT climbed 40.3% to €4.1 million, representing an operating margin of over 24%. The company is expected to have a positive cash position at the closing date.

In 2007, IEC expects to see further strong growth in both sales and EBIT, fueled by buoyant market conditions for sports rights and related services.

The acquisition agreement provides for an initial cash payment of €43 million followed by deferred payments over the next three years based on the achievement of certain income and cash flow targets. The maximum aggregate amount of these payments will be €37 million.

By integrating IEC within Lagardère Sports, the Group expects to generate the following synergies and benefits:

• The combined outfit will be in a position to offer enhanced bulk deals thanks to the complementary fit between the IEC and Lagardère Sports catalogs and portfolio rights.

• Lagardère Sports’ financial strength will help the company to develop larger scale sports offerings that are currently beyond IEC’s reach.

• The expansion of the Group’s operations in Asia will pick up pace significantly.

• IEC’s skills in producing sporting events will be put to use in other areas of Lagardère Sports’ catalog.
• The acquisition will extend the Group’s operating scope to new sports and provide a point of entry into the new media arena, representing an additional customer category for Lagardère.

Completion of the acquisition is subject to approval from the German antitrust authorities and is expected to take place by end-August 2007.

The Lagardère Group is a market leader in the media sector (books, press, audiovisual, distribution of cultural and entertainment products, and sports rights). The Group also has interests in the high technology sector via a 14.98% stake in EADS.

Lagardère shares are listed in Paris on Eurolist by Euronext – Compartment A.