MAIN NEWS HEADLINES
June 26 – July 3, 2008 Edition
RC2 Corporation to Acquire
Publications International’s
Childrens Publishing Unit
OAK BROOK, IL/6/23/08–RC2 Corporation has signed definitive purchase agreements to acquire the Childrens Publishing Division (CPD) of privately-held Publications International, Ltd. CPD based in Lincolnwood, Illinois, is one of the worlds top childrens book publishers, selling more than 10 million books annually. CPD introduces hundreds of new titles each year and has long-standing relationships with key childrens property licensers. CPDs products, which include electronic books, story books, Story Reader® and Poingo, are sold at toy, mass merchandising, warehouse clubs and book retailers throughout North America, Europe, Latin America and Asia.
CPDs net sales for the twelve months ended March 31, 2008 were approximately $112.0 million with operating income margin in the mid-teens. The acquisition, which is expected to close in July, 2008, is an asset purchase and is subject to regulatory approvals and other customary closing conditions. The purchase agreement calls for payment of $163.0 million of cash.
Curt Stoelting, CEO of RC2, said, We are truly excited to be announcing the signing of the CPD transaction today. This transaction is consistent with our strategic plan to complete synergistic acquisitions which strengthen and diversify RC2s business.
The childrens publishing business is a strong strategic fit with our Learning Curve brand and creates an early learning platform which complements both our Mom, Infant and Toddler and Preschool product segments. CPDs childrens book portfolio and its licensing relationships will leverage RC2s operating infrastructure and enhance the growth opportunities for our Learning Curve brand.
CPDs products and the team members joining RC2 will enhance our strategy of building consumer loyalty with branded products that encourage repeat purchases because they are fun to own and use. The addition of CPD will allow RC2 to provide additional learning solutions to children and their parents.
Stoelting concluded, As we look forward, we expect CPD to be accretive to earnings in 2008 and the future. CPD will further improve RC2s competitive position in the early learning market, create a platform for new lines of early learning products and create additional opportunities for international expansion.
Richard Maddrell, President of Publications International, Limited, said, RC2 is the ideal long-term home for our childrens publishing business and the dedicated personnel who have built this business over the past 15 years. We expect a smooth transition of the childrens business to RC2 and believe that as part of RC2s Learning Curve brand, this business is well positioned for meaningful future growth.
RC2 is leading designer, producer and marketer of toys, collectibles, and infant and toddler products, selling under the product names Learning Curve, Johnny Lightning and Ertl brands. The company’s customer base includes warehouse clubs and big box retailers. RC2 had sales in 2007 of $489 million and earnings of $21.7 million.