Toronto-based children’s entertainment giant Spin Master announced Wednesday that it is acquiring early childhood play company Melissa & Doug for US$950 million, sending its shares higher.
Spin Master, which is known for brands including Paw Patrol, Bakugan, Kinetic Sand and Rubik’s Cube, said the acquisition is strategic and complementary, adding U.S.-based Melissa & Doug’s wooden toys to its early childhood offering.
The acquisition adds a brand portfolio that generated US$489 million in revenue in 2022 and is expected to be accretive to earnings per share (EPS) in 2024.
"What excites us so much about Melissa & Doug is the power of their brand, their deep knowledge in developmental play and their passion for creativity, imagination and sustainability," Spin Master CEO Max Rangel said in a statement.
"As a trusted brand of early childhood toys with an evergreen portfolio, Melissa & Doug will expand Spin Master's presence in new categories, providing immediate revenue growth, broader reach in all retail channels and market coverage.”
Spin Master said it would finance its purchase with approximately $450 million in balance sheet cash and $500 million in debt financing.
Its shares rose 6.4% on the news, trading at US$26.61 on Wednesday afternoon.
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