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Chegg Acquires Imagine Easy Solutions, A Market Leader Of Online Writing Tools

SANTA CLARA, Calif., May 2, 2016 /PRNewswire/ -- Chegg, Inc. CHGG, +2.20% the Student Hub, today announced that it has acquired Imagine Easy Solutions ("Imagine Easy"), the provider of popular service and other essential writing tools with capabilities such as citations, bibliography, writing structure and anti-plagiarism, used by more than 7 million unique users in March 2016.

"We know that writing is one of the biggest pain points for students today, with about one quarter of all college freshmen required to take remedial writing courses and employers rating less than 30% of recent graduates as being well prepared written communicators," said Dan Rosensweig, Chairman and CEO of Chegg. "Inability to write at the college level is a leading indicator of which students will eventually drop out, a situation that adversely impacts both the student and the school. With this acquisition, Chegg now has the ability to serve the millions of students who depend on writing help every day, in particular those students required to take remedial writing classes."

Chegg has acquired Imagine Easy for approximately $42 million in an all-cash transaction, approximately $25 million of which was paid at closing and $17 million of which is to be paid by April 2017. There are potential additional payments of up to $18 million over the next three years that remain subject to contingencies. These contingent payments may be settled either in cash or common stock, at the discretion of Chegg.

Similar to Chegg's existing revenue model, Imagine Easy's diversified revenues are composed of subscriptions and digital advertising. The transaction is anticipated to be accretive to Chegg's fiscal 2016 revenues and earnings.

Writing deficiencies have become one of the biggest education issues today and writing is the most frequently requested area for help among high school and college students:

  • Only 27% of employers rated recent college grads are well prepared as written communicators; [[i]]
  • Nearly 25% of college freshman are required to take...