EAGLE RETAIL INVESTMENTS LIMITED ACQUIRES EARLY LEARNING CENTRE

TIM WATERSTONE AND NIGEL ROBERTSON CREATE NEW FORCE IN CHILDREN'S RETAILING

Eagle Retail Investments Limited, the company set up by Tim Waterstone, the founder of the bookshop chain that bears his name, and Nigel Robertson, former Joint MD of online retailer Ocado and senior Marks and Spencer Executive, announced today that it has acquired Early Learning Centre (ELC), the children's toy chain, from its management and 3i, a leading European venture capital company. The purchase price was £62 million.

Partners in Eagle Retail Investments are Rhne Capital LLC, a transatlantic mid-market private equity firm and D.C. Thomson & Co. Ltd., the Scottish Publishing Group. Bank of Scotland Corporate Banking is the provider of all debt facilities to the transaction.

Eagle Retail Investments has simultaneously acquired Chelsea Stores, which owns the Daisy and Tom retail outlets, the brainchild of Tim Waterstone, which he set up in 1997.

The acquired businesses will be merged, but the two distinctive brands will be maintained and developed separately. Tim Waterstone said: "ELC and Daisy & Tom are two of the finest brands in children's retailing. They are a perfect fit, and together will become a powerful High Street and online force."

Commenting on the transaction, Mike France, the managing director of ELC said, "With the turnaround of ELC completed, we are delighted that the business has been acquired by Tim Waterstone and we are sure that he will continue to develop the business as part of the enlarged group."

Graham Miller of 3i said, "This investment has been an outstanding success. Mike France, Peter Ellis and their team have done a superb job in turning ELC around and restoring a leading retail brand. We wish Tim Waterstone and his colleagues every success with the business."

Early Learning Centres has over 200 high street and out of town stores in the UK. Turnover is approximately £170 million. Daisy and Tom's turnover was £15 million from its 5 outlets.

Tim Waterstone is Executive Chairman of Eagle Retail Investments and Nigel Robertson is Chief Executive. 3i and the ELC shareholders were advised on the transaction by Close Brothers Corporate Finance.