Mega Brands offers up stationery business
By Staff -- Playthings, 3/5/2008 7:26:00 AM
MONTREAL—Mega Brands today said it is considering selling its primarily Rose Art-branded stationery and activities business, one day after members of Rose Art’s founding family announced they had expressed interest in reacquiring the Rose Art business last month.
Mega Brands says that selling its stationery and activities division would help the company better focus on its core toy business, increase resources to and boost management’s attention to its shareholder-oriented “Value Enhancement Plan,” and provide the company with “a stronger and more flexible capital structure.”
"As previously announced in December, 2007, the company has been pursuing a Value Enhancement Plan to enhance shareholder value and respond to market challenges. The sale of the company's stationery and activities business is being considered as a means of generating meaningful cash proceeds to reduce its existing debt and allow the company to place increased focus on its core toy business," said Marc Bertrand, Mega Brands’ president and CEO. "Our stationery and activities business has consistently delivered solid performance. This is a strong business with solid market positions in North America and we believe it would be an attractive acquisition to both strategic and financial buyers."
The business generated more than $200 million in sales in 2007.
According to the company, there have been “several other unsolicited expressions of interest” in Mega Brands’ stationery and activities business in addition to former Rose Art owners Lawrence and Jeffrey Rosen. Mega Brands added that the Rosens provided “no particulars” about their interest in reacquiring Rose Art and noted that there remains “ongoing litigation initiated by the former Rose Art owners against the [Mega Brands].”
In addition to Rose Art’s art materials (crayons, colored pencils, highlighters and markers) and craft and activity sets, Mega Brands’ stationery and activities unit also includes SRX and USA Gold writing instruments, and Board Dudes dry-erase and cork presentation boards, organizers and accessories.
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