Spin Master has boosted its presence in the preschool and early childhood sector at a stroke after announcing it has agreed to acquire Melissa & Doug in a deal worth $950 million.
The deal will see what Spin Master called “a well-recognised and trusted brand in early childhood play” come under its wing, and will “bolster Spin Master’s “position as a leader in the children’s entertainment industry and will bring complementary capabilities in early childhood toys by adding Melissa & Doug’s high-quality offerings of open-ended, creative, and developmental wooden toys”.
Melissa & Doug has built its reputation by developing high quality sustainable products and Spin Master chiefs noted that the addition of Melissa & Doug to its roster will add complementary early childhood products to its portfolio as well as “diversifying its range across new channels and formats”.
Spin Master global president and CEO Max Rangel said: “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. 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. The addition of Melissa & Doug is highly complementary and connects with our strategic vision to reimagine everyday play, providing a compelling platform for long-term growth through innovation, while also meeting the changing demands of children and parents of the future.”
Melissa & Doug President and CEO, Fernando Mercé commented: “Throughout our 35-year history, Melissa & Doug has helped ignite children’s imaginations by fostering open-ended, sustainable play. We are confident that by working together with Spin Master, we will be able to reach more families, inspire more imaginations and unlock greater growth potential.”
Spin Master’s Co-founder Anton Rabie added: “We have an incredible history of pursuing accretive acquisitions to propel our growth as a company and have become trusted stewards of many renowned and beloved children’s brands.
Fellow Spin Master co-founder Ronnen Harary added: “With this acquisition, we are committed to preserving the essence of what Melissa & Doug represents for families and are confident that our investment will enable us to accelerate growth and build upon our legacy as a leader in the children’s entertainment industry now and into the future.”
Outlining the benefits Spin Master further noted that Melissa & Doug added a trusted brand to its portfolio and its product chimed with modern parents’ desire for sustainable wooden toys and screen-free play; innovation growth opportunities; boosted Spin Master’s preschool and early childhood presence; offered an “evergreen product portfolio” and would also move Spin Master into speciality retail and e-commerce channels as well as offering growth in mass market retailers and internationally.
It also highlighted the financial benefits, notably the “attractive brand portfolio of $489 million in revenue in 2022”.
The $950 million deal is made up of $450 million in cash and $500 million in debt financing, with additional earnouts subject to hitting targets in 2024 and 2025.
