Direct-to-Student Offering Expands BNED’s Digital Portfolio

Financially Accretive Transaction Benefits Support Growth Strategy

Enhances Both BNED’s and Student Brands’ Market Reach

BASKING RIDGE, N.J.–(BUSINESS WIRE)– Barnes & Noble Education, Inc. (NYSE: BNED) (“the Company” or “BNED”), a leading provider of educational products and services solutions for higher education and K-12 institutions, announced today that it has completed the acquisition of Student Brands, a leading direct-to-student subscription-based writing skills services business, for $58.5 million in cash.

Student Brands is an education technology company that operates multiple direct-to-student businesses focused on Study Tools, Writing Help, and Literary Research, all centered around assisting students with the writing process. Student Brands has a substantial and growing community of online learners, with over 20 million unique monthly users across its digital properties, which include 123HelpMe.com, Bartleby.com and StudyMode.com in the United States and TrabalhosFeitos.com, Etudier.com and Monografias.com in Brazil, France and Mexico, respectively. Student Brands utilizes deep data analytics and artificial intelligence to drive its proprietary content management system, the Content Brain. The Content Brain sifts through millions of pieces of content and provides the best answer for virtually any assignment a student is tackling. Student Brands generates revenue predominantly through its subscription-based services and digital advertisements.

Kanuj Malhotra, Chief Operating Officer, Digital Education, Barnes & Noble Education, said: “The acquisition of Student Brands enables BNED to maintain and expand our leadership position in the distribution and provision of educational services and content. The lack of writing proficiency is one of the most significant challenges in our education system, and Student Brands provides a significant opportunity to serve this market with solutions that improve student performance. BNED serves one in four higher education students every year, and through our recent acquisition of MBS, we have expanded our market reach to even more students in both higher education and K-12. The addition of Student Brands and its nearly 100,000 subscribers will enable us to offer products and services directly to our current student base and beyond.”

Transaction Benefits
The transaction builds on the Company’s strong growth momentum in digital learning, and will further enhance its ability to support partner schools’ retention efforts by helping students and teachers embrace technology tools that improve writing proficiency. The experienced management team at Student Brands provides deep online and customer monetization experience. BNED serves more than six million students, as well as parents and alumni. With this acquisition, BNED extends its industry-leading reach and deepens its relationships with students and faculty by adding a direct-to-student digital channel. By leveraging the BNED footprint among students and faculty, K-12 schools and higher education institutions, Student Brands will have substantially more opportunities to market the services students need to improve performance in the classroom and secure jobs after graduation.

“We help millions of students every month with the critical skills that they need to succeed – whether it’s writing a paper for class or drafting a college application essay. As student demand for extra help with writing and study tools continues to grow, we are delighted to be joining forces with a company whose scale, resources and expertise will help drive further innovation in our products and expand our addressable market,” said Thomas Swalla, Chief Executive Officer, Student Brands. “Barnes & Noble Education shares our mission to provide students with innovative solutions to solve a growing range of academic challenges. We are confident that this is an ideal combination and we are thrilled to begin working with our new colleagues.”

Market Opportunity
Writing proficiency is one of the most critical skills needed by graduates across all industries, and students in the U.S. spend more than $3 billion dollars annually on remedial education, including remedial writing instruction1. The writing proficiency deficit is widespread, negatively impacting students, new graduates and employers:

82% of high school students and 96% of college students require extra help and more than 20 million students consider writing help an ongoing need2;

New graduates are struggling to find work3 or accept jobs that do not require degrees4; and employers are struggling to find qualified graduates to hire5.

Transaction Details
The Company utilized cash on hand and availability under its current credit facility to finance the acquisition. Student Brands is expected to contribute over $10 million of EBITDA to BNED’s consolidated operation results over the next twelve months. Student Brands has negligible recurring capital expenditures, resulting in strong free cash flow generation. The acquisition will be accretive to BNED’s EBITDA, Net Income and Cash Flow in FY2018. Additionally, the acquisition is structured to “step up” the tax basis of Student Brands’ assets and is expected to result in significant future tax savings.

Student Brands will operate as a part of BNED’s digital operations and will serve as its initial anchor asset for BNED’s direct-to-student growth strategy. Mr. Swalla will remain CEO of Student Brands and the current Student Brands leadership team will join BNED as full-time employees. Student Brands will retain its offices in Los Angeles, CA and India.

Advisors
Cyndx Advisors LLC acted as exclusive financial advisor and Gibson, Dunn & Crutcher, LLP served as legal counsel to Barnes & Noble Education in connection with the transaction. Vaquero Capital LLC acted as exclusive financial advisor and LKP Global Law, LLP served as legal counsel to Student Brands in connection with the transaction.

Conference Call Information
BNED will host an investor call to discuss this transaction on Monday, August 7, 2017, at 10:00 a.m. ET. The conference call can be accessed via a live webcast at www.bned.com/investor or by dialing 888-510-1767 and entering passcode 236805. A replay of the call will be available through Monday, August 14 via webcast at www.bned.com/investor or by dialing 866-375-1919 and entering passcode 9916801. An investor presentation will be posted to the Barnes & Noble Education, Inc. website (www.bned.com/investor) prior to the conference call.

About Barnes & Noble Education, Inc.
Barnes & Noble Education, Inc. (NYSE: BNED), one of the largest contract operators of physical and virtual bookstores for higher education and K-12 institutions across the United States, one of the largest textbook wholesalers, and a leading provider of digital education services, enhances the academic and social purpose of educational institutions. Through its Barnes & Noble College and MBS subsidiaries, Barnes & Noble Education operates 1,481 physical and virtual bookstores and serves more than 6 million students, delivering essential educational content and tools within a dynamic retail environment. Through LoudCloud, its digital education platform, Barnes & Noble Education offers a suite of digital software, content and services that include predictive analytics, OER courseware, competency-based solutions and a learning management system. Barnes & Noble Education acts as a strategic partner to drive student success; provide value and support to students and faculty; and create loyalty and improve retention, all while supporting the financial goals of college and university partners.

General information on Barnes & Noble Education, Inc. can be obtained by visiting the Company’s corporate website: www.bned.com.

About Student Brands
Student Brands is an education technology company that operates multiple direct-to-student businesses focused on Study Tools, Writing Help, and Literary Research. The Student Brand network of sites provides real tools and answers for students around the globe. With more than 20 direct-to-student sites in more than 10 countries, Student Brands provides writing and study tools that help millions of students succeed in high school, college, and post-graduate studies.