RM plc (LON:RM), a leading global educational technology, digital learning and assessment solution provider, has announced that it has completed the sale of the entire issued share capital of its wholly-owned subsidiary RM Educational Resources Limited, the operator of the Group’s TTS business, to Eduviva Group AB for a total enterprise value of up to £53.5 million.
Highlights
- Sale of TTS for a total enterprise value of up to £53.5 million, comprised as follows:
- £36.3 million of initial consideration which, after applying locked box and other adjustments results in a completion payment of £32.6 million;
- £14.2 million Harrier Park lease liability removed from the Group; and
- up to a further £3.0 million of deferred consideration payable in cash linked to RMER’s financial performance in the 12-month period following Completion.
- Fully aligns with RM’s strategy to simplify the business and focus on the substantial growth opportunities in the Group’s core Assessment business.
- Net cash proceeds will reduce net cash debt by c.£31 million (after fees); net debt, including lease liabilities, is now expected to be c.50 per cent. lower at 30 November 2026, at c.£34 million.
- The Company’s liabilities continue to fall with the removal of the £14.2 million Harrier Park lease liability; this follows the latest Section 75 defined benefits pension scheme valuations, having fallen from a combined c.£31 million in the 2024 Triennial valuations to a minimal level today.
- In line with the Company’s simplification strategy, annualised cost savings of c.£5 million are expected to be actioned by the end of the financial year ending 30 November 2027 and fully realised in the financial year ending 30 November 2028.
Commenting on the Disposal, Mark Cook, Chief Executive of RM, said:
“Today’s announcement is yet another important milestone in the transformation of RM plc. The sale of TTS will simplify our business, significantly reduce RM’s net debt position, enabling us to capitalise on the high growth, global opportunities in digital assessment and to enhance our educational IT services business.
“We are pleased to have found a buyer for TTS which is familiar with the business. With a number of their brands having acted as key distributors, we believe Eduviva Group is well-placed to build on the success TTS has enjoyed over many years.
“I would like to thank all my TTS colleagues for their commitment over the years. Today’s announcement is a testament to their hard work and the fundamental strengths of the TTS business.”
Strategic rationale and the Board’s views on the Disposal
Overview
TTS designs, develops and createsinnovative, curriculum aligned educational resources that make learning engaging, inclusive, and hands on.
The Disposal comprises the sale of the entire issued share capital of RMER, including its over 200 employees. RMER’s current senior management will predominantly remain with TTS on Completion. Eduviva intends to support TTS’ growth plans and further develop its customer base overseas.
The Board’s view of the Disposal
In the Board’s opinion, the Disposal is in the best interests of the Company’s shareholders (“Shareholders”) as a whole, as it fully aligns with RM’s strategy to: (1) simplify the Group’s business; (2) significantly reduce net debt; (3) and focus on the Continuing Group as a pure-play EdTech business, which the Directors believe includes significant growth opportunities in Assessment. In parallel, RM will continue to pursue opportunities for its Technology business, building on an established position in schools to expand further into other areas of education and the broader public sector.
Simplification of the business
The separation work that the Company committed to at the time of the equity raise announced on 10 October 2025 has helped pave the way for the Disposal and unlocks an opportunity to further reduce the Group’s legacy overheads. Assessment and corporate services went live with a new, standalone enterprise resource planning system in June this year with Technology’s transition to follow. Having already reduced Group overheads and operational costs by approximately £30 million in the last three years, and in line with the Company’s simplification strategy further cost savings of approximately £5 million on an annualised basis are expected to be realised in full in FY28. This includes the £3 million of savings to be realised by the end of FY27, as previously announced.
Significant reduction in net debt
The net proceeds of the Disposal of approximately £31 million after fees will be deployed to reduce the ’Continuing Group’s net debt; a principal objective previously announced. This reduction, along with removing a £14.2 million lease liability from the Continuing Group’s balance sheet, will make RM financially stronger with a more normalised level of debt. The Continuing Group’s lenders continue to be supportive of RM’s stated strategy.
Pension Schemes update
The Continuing Group’s financial position has also been strengthened by the latest Section 75 valuations of the defined benefits pension schemes. The Section 75 deficits have fallen from a combined c.£31 million in the 2024 triennial valuations to a minimal level today and, as a result, the Board will assess the pension buy-in and buy-out options.
Focus on significant growth opportunities in Assessment
The strategic decision to develop a single, cloud-based accreditation platform, RM Ava, has created a substantial growth opportunity. RM Ava facilitates the full end to end assessment process; authoring exams, taking them, marking and grading. As accreditors shift towards fully digital exams, RM is expected to benefit from more assessments taken on its platform. Key customers have laid out a pathway to fully digital exams and RM expects this to be the market trend for accreditation in the coming few years. Additionally, Ava’s modularity and scalability enables RM to target opportunities beyond the education sector, such as government sponsored digital accreditations and a broader mix of professional qualifications. This is expected to allow RM to enter into a whole new target addressable market with government opportunities being large, multi-year and recurring by nature. The Disposal of RMER allows the Continuing Group’s management to focus even more on these growth opportunities.
The Disposal supports RM’s strategy and improves the Continuing Group’s long-term quality of earnings, given that TTS is a purely transactional business.
Summary of the Disposal
The Company and Eduviva have today entered into the Sale and Purchase Agreement pursuant to which Eduviva has acquired the entire issued share capital of RMER. The consideration payable under the Sale and Purchase Agreement is:
(a) £36.3 million of initial consideration which, after applying locked box and other adjustments, results in a completion payment of £32.6 million; and
(b) deferred consideration (if any) of up to an additional £3.0 million in cash subject to RMER achieving certain adjusted EBITDA targets for the period ending 12 months from Completion.
Through its acquisition of RMER, the Buyer will assume the obligations under the remainder of the lease for RMER’s property at Harrier Park, which has a rental liability of £14.2 million. Accordingly, the total enterprise value of the Disposal is £53.5 million representing an implicit multiple of 8.3 times the EBITDA of RMER for the financial year ended 30 November 2025.
The Disposal, because of its size in relation to RM, constitutes a “significant transaction” for the purposes of the UK Listing Rules and is therefore notifiable in accordance with UKLR 7.3.1R and 7.3.2R. In accordance with the UKLRs, the Disposal is not subject to shareholder approval.
Further details of the principal terms of the Sale and Purchase Agreement are set out in Appendix 1 of this announcement.
Summary information on TTS
TTS designs, develops and createsinnovative, curriculum aligned educational resources. In FY25, TTS developed 467 new products with 131 using TTS’ proprietary intellectual property. Headquartered in Nottingham, approximately three quarters of TTS’ sales are to UK schools and institutions with the remaining sales overseas, including the United Arab Emirates where a legal entity has been established. Notable products include the Bee-bot robot, designed to help young learners explore the basics of coding, direction and sequencing.
Effects of the Disposal on the Group
In FY25, RMER contributed revenue of £67.3 million, representing 41.5 per cent. of total sales for the Group and adjusted operating profit of £4.2 million, reporting an adjusted operating profit margin of 6.2 per cent. The gross assets of RMER as at 30 November 2025 were £49.9 million. Appendix 2 of this announcement includes key historic financial information on RMER.
Financial outlook
Had the Disposal not taken place, the Company would have reported adjusted operating profit and EBITDA for the full year in line with market expectations for the year ending 30 November 2026 (“FY26”) with revenue slightly down on the prior year, as previously reported. The performance was positively impacted by TTS delivering trading higher than expectations in the second half. Alongside this, Technology has continued to be impacted by the challenging UK schools’ market, as previously reported, and tenders for specific Assessment new business are taking longer than expected which delays the opportunity to recognise revenue.
Following the Disposal, adjusted operating profit and EBITDA of the Continuing Operations for FY26 are expected to be £3 million and £6 million, respectively. This is impacted by one off stranded corporate costs totalling £2.8 million, that were previously allocated to TTS, remaining in full for FY26 due to the Disposal completing late in the financial year.
The Company remains on track to meet FY27 market expectations for adjusted operating profit (£6.6 million) and EBITDA (£10.9 million), after adjusting for the disposed TTS business.1 This includes realising c.£3 million out of a total £5 million of annualised cost savings made possible due to separation work (see above), and the Disposal. The remaining c.£2 million of savings will be realised in FY28.
Net Debt
Net debt, including lease liabilities, is now expected to be c.50% lower at the end of FY26 at around £34 million.
Note
1 The Company understands that market expectations for FY27 adjusted operating profit and adjusted EBITDA excluding TTS are £6.6m and £10.9m, respectively.
