JAKKS GETS PLAY ALONG IN TOY DEAL CABBAGE PATCH KIDS AMONG FIRM'S LICENSING.Byline: Brent Hopkins Staff Writer The Cabbage Patch Kids Cabbage Patch Kids are a brand of doll created by Xavier Roberts in 1978. The original dolls were all cloth and were available at local craft shows, and later at Babyland General Hospital in Cleveland, Georgia. will now have a home in Malibu, as Jakks Pacific JAKKS Pacific, Inc. NASDAQ: JAKK is is a multi-brand company that designs and markets a broad range of toys and consumer products and is based in Malibu, California. Its product categories include action figures, art activity kits, stationery, writing instruments, performance Inc. announced Tuesday that it plans to acquire toy-maker Play Along. Under the proposed deal, Jakks will pay $116 million for the Deerfield, Fla.-based Play Along, which has licenses for the revived Cabbage Patch Kids dolls, Care Bears plush toys and Batman play sets. The news, announced after the market close on Tuesday, surprised many toy-industry watchers. ``Jakks is just itching itching or pruritus Stimulation of nerve endings in the skin, usually incited by histamine, that evokes a desire to scratch. It is often transient and easily relieved. Pathological itching with skin changes usually signals dermatologic disease. to be up there with Mattel and Hasbro, and it looks like they're on the right track,'' said Maria Weiskott, editor-in-chief of Playthings Magazine. ``It appears that the toy-makers are closing ranks and consolidating for strength.'' The Malibu-based Jakks had more good news for the investment community, reporting strong first-quarter sales and earnings at the same time. Sales hit $74 million, up from $67.8 million the year before. Earnings were constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. somewhat, stemming from lingering lin·ger v. lin·gered, lin·ger·ing, lin·gers v.intr. 1. To be slow in leaving, especially out of reluctance; tarry. See Synonyms at stay1. 2. bankruptcy costs from Kmart Corp.'s 2002 financial problems and compensation charges. Including the $1.7 million in one-time charges, income dipped to $4.3 million, 17 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , from $6 million, 24 cents per share, in the same period a year ago. The company also offered guidance of $340 million in full-year sales and earnings per share around $1.30, without factoring in the Play Along acquisition. Jakks shares had slipped 2 cents to $15.12 at the market's close, but added another 18 cents after hours Adv. 1. after hours - not during regular hours; "he often worked after hours" to rise to $15.30. ``It's a major coup to me,'' said Arvind Bhatia, a senior vice president at the Dallas-based investment bank Southwest Securities Inc. ``The sales and income from Play Along will mean this will add 40 to 50 cents in earnings.'' Jakks said its new subsidiary will bring with it hefty sales and income, reported at approximately $160 million in revenue and approximately $30 million in earnings last year. Better still for Jakks, president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. Stephen Berman said the deal will give it a long-sought year-round product line. The company has heavily invested in acquisitions in recent years to give it more boys' and summer products, but had never tested the plush and preschool markets. ``We're extremely well-rounded now,'' he said. ``This gives us a complete company. We're very diversified, so if one area's sluggish, another one will be on the upswing Upswing An upward turn in a security's price after a period of falling prices. .'' Executives for Play Along were unavailable for comment. Industry veterans praised the deal, expected to be complete in the second quarter. Under the proposed terms, Jakks will pay $75 million in cash, $11 million in stock and up to $30 million in supplementary payments based on future earnings. ``This is a big deal and someone's going to make a lot of money off it,'' said Dave Schwartz, senior vice president of marketing for What Kids Want Inc. of Northridge. ``The industry has been awaiting their next acquisition, and this squarely puts them into the preschool aisle with Care Bears.'' Brent Hopkins, (818) 713-3738 brent.hopkins(at)dailynews.com |
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