Several recent purchases and alliances have boosted first-quarter sales for six-year-old Riverdeep Group plc of Cambridge, Mass., and Dublin, Ireland, which develops and distributes multiplatform k—12 educational software for the home and school, including Destination Math and Science Explorer.
For the quarter ended September 30, 2001, Riverdeep's revenue jumped to $29.6 million, from $4.1 million for the same quarter a year ago. It had adjusted net income of $3.2 million, compared with a loss last year of $7.9 million.
Riverdeep's September acquisition of the Learning Company (TLC) name and software, including Reader Rabbit, Carmen Sandiego and Mavis Beacon Teaches Typing, should continue to fuel the company's growth. TLC already has a high level of name recognition in the school market. According to Don Davidson, Riverdeep v-p of indirect sales, and TLC general manager, Riverdeep plans to sell TLC software under the Riverdeep/TLC name.
This purchase was followed by strategic alliances with Harcourt Education Group, owned by Reed Elsevier, and Encyclopaedia Britannica Inc. As part of the Harcourt agreement, Riverdeep will collaborate on the development of e-Basal interactive products for grades k—12. Davidson said that these new products will be fully interactive books, and estimated that the first ones will be available in two to three years.
At the same time, Reed Elsevier made an equity investment of $25 million in Riverdeep. Reed Elsevier now holds approximately 3.8% of the outstanding share capital of Riverdeep. Earlier this summer, Riverdeep hired Harcourt president and COO James P. Levy as executive vice chairman responsible for all educational operations; he is now COO as well.
Under its agreement with Encyclopaedia Britannica, Riverdeep will become the exclusive distributor of Britannica's CD-ROMs and DVDs in the school market in the U.S. Britannica will sell Riverdeep's CDs to consumers and schools through direct marketing and its online store. Davidson said his firm "had a need in the reference part of our curriculum offerings," and said the alliance "gives us a great entry back into the market."
