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Mattel acquires Mega Brands and enters the construction toys business

The firm has paid $460 million

  • Key4Communications

Mattel has announced the purchase of the Canadian toymaker Mega Brands for $460 million. The Californian toy maker will pay C$17.75 per share, 32% above the average price of the past 30 days, to buy the second world company in the construction toys category, leading sales in products of this segment aimed at preschoolers.

Mega Brands has also a significant presence in the arts and crafts category, in addition to manufacturing licensed products under brands such as Halo, Skylanders, Call of Duty, Hello Kitty, and SpongeBob. It also manufactures construction toys for Barbie and Hot Wheels.

In addition, the toy company records annual profits before taxes of nearly $50 million and sales of over $400 million. It is among the 15 largest toy manufacturers in the world, according to NPD.

Mega Brands was founded in 1967 in Montreal, Canada, where it still has its headquarters, and counts with 1,700 employees in 17 countries. Mattel plans to keep both the offices and factories in Montreal and Tennessee.

"A key pillar of our global growth strategy is the strategic acquisition of brands that will both benefit from our scale and help extend our reach into new and growing categories," said Bryan G. Stockton, Mattel Chairman and CEO. "The construction play pattern is popular, universal and has had one of the fastest growth rates over the past three years."

We should keep in mind that LEGO is growing steeply and despite being present only in the construction category, it is already the second company in the industry by revenue and the first by profits.

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