Wow, this is a MAJOR business deal for Mega. Mattel now owning it means even MORE exposure for the brand. It makes sense now as Mega had picked up the licenses for Barbie and Hot Wheels, both Mattel toy lines.
Hopefully this won’t mean a change or an end to the Halo line. I have a feeling it won’t as the Halo Mega Bloks line continues to be a huge seller for Mega.
The following is a reblog from the New York Times:
Mattel Agrees to Buy Maker of Mega Bloks, a Lego RivalBy WILLIAM ALDEN With “The Lego Movie” a box office smash, the toy maker Mattel is getting in on the craze for plastic bricks.
Mattel said on Friday that it had agreed to buy Mega Brands, a smaller company based in Montreal that sells plastic construction bricks and arts and crafts sets. The deal has an enterprise value, a measure that includes debt, of $460 million.
The price, 17.75 Canadian dollars ($15.96) a share, represents a 32 percent premium to the 30-day volume-weighted average price of Mega Brands shares as of Wednesday, the companies said. Mattel, which is based in El Segundo, Calif., plans to finance the deal through a mix of new debt and cash on hand.
For Mattel, the maker of Barbie and Hot Wheels., the deal allows it to expand into two toy categories that are growing quickly. The company has already dipped a toe into plastic bricks, teaming upwith Mega Brands in 2012 to make a Barbie construction set.
Mega Brands has had success with its popular Mega Bloks toys, but it lacks the dominance of its Danish rival Lego. The deal could help it grow internationally.
With “The Lego Movie” topping the North American box office for three weekends in a row, the companies may sense an opportunity to promote Mega Bloks overseas.
“The construction play pattern is popular, universal and has had one of the fastest growth rates over the past three years,” Bryan G. Stockton, Mattel’s chairman and chief executive, said in a statement. “We look forward to helping Mega Brands accelerate its global growth.”
Shareholders representing about 39 percent of the stock of Mega Brands have agreed to support the deal, the companies said. The board of Mega Brands has also approved it.
Mega Brands had estimated net sales of $405 million for its 2013 fiscal year. The company has about 1,700 employees in 17 countries.
“Mattel is the ideal partner to take our brands to the next level,” Marc Bertrand, the president and chief executive of Mega Brands, said in a statement.
Mattel was advised by RBC Capital Markets and the law firms Latham & Watkins and McCarthy Tétrault in Canada. Mega Brands was advised by Rothschild and the law firm of Osler, Hoskin & Harcourt.
HFFL: VERY interesting indeed!