Mattel to buy Canada's Mega Brands for about $460 million

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J1A3L5
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Mattel to buy Canada's Mega Brands for about $460 million

Post by J1A3L5 »

From Reuters:
Mattel Inc (MAT.O), the world's No. 1 toymaker, said it agreed to buy Canada's Mega Brands Inc (MB.TO) for about $460 million, including debt, to expand its construction and arts and crafts offerings.

Mattel, known for its Barbie and Hot Wheels brands, offered C$17.75 per Mega Brands share, representing a premium of 36 percent to the stock's close of C$13.07 on Thursday.

"The construction play pattern is popular, universal and has had one of the fastest growth rates over the past three years," Mattel's Chief Executive Bryan Stockton said in a statement.

Montreal-based Mega Brands makes construction toys and arts and crafts under brands such as MEGA Bloks, Rose Art and MEGA puzzles. The company said it has estimated net sales of $405 million in 2013.

Construction toys and other traditional toys have become popular among parents seeking to limit the amount of time their children spend using iPads and other electronics with screens.

Both Mattel and its U.S.-based rival Hasbro Inc (HAS.O) posted lower-than-expected results in the fourth quarter.

In contrast, Denmark's Lego, mostly known for its colorful bricks, increased sales by 10 percent in a sluggish global toy market in 2013.

Mattel said on Friday that shareholders holding 39 percent of Mega Brands, comprising its biggest, Fairfax Financial Holdings Ltd, and the company's founding family, have agreed to vote in favor of the deal.

Mega Brands will pay a termination fee of $12 million to Mattel if it accepts an unsolicited proposal, subject to Mattel's right to match the proposal, the companies said in a joint statement.

Mattel said it plans to fund the acquisition through a combination of new debt and cash.

RBC Capital Markets is acting as financial adviser to Mattel, while Latham & Watkins LLP is acting as legal adviser and McCarthy Tetrault LLP as Canadian legal adviser.

Rothschild is acting as financial adviser and Osler, Hoskin & Harcourt LLP is acting as legal adviser to MEGA Brands.

Mattel shares have fallen about 9 percent in the past 12 months to their Thursday close of $37.15 on the Nasdaq.
-John.

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Joseph
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Post by Joseph »

I see this as good news, it will create competition. Lego had to change it's game mid decade and it was all for the better. I didn't know that Mega did Rose Art, that is *totally* the Megablocks of the craft world. I've had candles that coloured better than Rose Art crayons.

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