D. E. Shaw Affiliate Acquires Online Assets of KB Toys; New Company to be Named eToys Direct, Inc.Business Editors NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of & DENVER--(BUSINESS WIRE)--May 11, 2004 The D. E. Shaw group announced today that one of its affiliates has completed the acquisition of the online assets of KB Toys, Inc. The acquired assets include the inventory, equipment, leases, and proprietary technology of KB Online Holdings LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control as well as eToys trademarks, URLs, and associated intellectual property. Former members of KB Online Holdings senior management, including Michael J. Wagner, supported the transaction and will hold a significant minority equity stake in the new company, eToys Direct, Inc., formed to own and operate the acquired assets. Mr. Wagner will be the CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of eToys Direct, which will be headquartered in Denver. eToys Direct, Inc. will own and operate the eToys Web site (www.etoys.com) and a 650,000 square foot state-of-the-art fulfillment facility in Blairs, Virginia, and will continue to operate the KBtoys.com Web site (www.kbtoys.com) under a long-term licensing agreement with KB Toys. eToys Direct will also continue to provide merchandise, order fulfillment, and customer service to other online and catalog retailers through its various retail alliances. "We're excited at the prospect of growing the eToys Direct business, especially by expanding alliances with established online and catalog retailers," said Max Holmes, a managing director of D. E. Shaw & Co., L.P. and head of the firm's distressed securities Distressed Securities A company that is currently going through hard times and, as a result, the market value of its securities or assets fall substantially in value. Notes: These securities then become attractive to bottom fishers or vultures. group. "In addition, the acquisition will be an excellent complement to the online business of FAO FAO, n See Food and Agriculture Organization. Schwarz, which we acquired in January." The sale price includes approximately $7.4 million in cash plus a minimum royalty payment to KB Toys, Inc. of $500,000 per year for the next three years. In addition, a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of D. E. Shaw Laminar laminar /lam·i·nar/ (lam´i-nar) 1. pertaining to a lamina or laminae. 2. laminated. 3. of, pertaining to, or being a streamlined, smooth fluid flow. Portfolios has agreed to provide a $20 million line of credit to eToys Direct. The acquisition was approved by Judge Joel B. Rosenthal of the U.S. Bankruptcy Court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. , District of Delaware on April 29, 2004. eToys Direct, Inc. will operate as a subsidiary of D. E. Shaw Laminar Portfolios, L.L.C., whose activities include the deployment of capital in connection with the restructuring of companies with valuable assets that may currently be experiencing financial distress. D. E. Shaw Laminar Portfolios is a member of the D. E. Shaw group, a New York-based investment and technology development firm with approximately $8 billion in aggregate capital. |
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