Under the proposed terms, the investor group led by Safanad Limited would own a majority stake in the new company. K12 would own an initial minority stake in the company greater than 25 percent and would contribute the International School of Berne; Capital Education; its interest in an existing Middle East joint venture currently operating with a Safanad affiliate; the United Kingdom businesses that K12 recently launched; the rights to market K12's new pre-kindergarten product, EmbarK outside the U.S.; and other select assets and licenses (the "K12 Contributed Assets"). In the aggregate, the K12 Contributed Assets were responsible for $20.8 million in revenue and had direct operating losses of approximately $3.0 million for K12's fiscal year ending June 30, 2013. The partners have executed a non-binding letter of intent and are working to complete definitive agreements in the coming weeks, at which time additional financial and operational details will be announced.
Ron Packard, Founder and former CEO of K12, has resigned from K12 and will lead the new company as its CEO. However, he will continue to actively serve on K12's Board of Directors. Nate Davis has been appointed as K12's new CEO and will continue to serve as its Chairman of the Board.