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GALOOB ANNOUNCES INTENT TO ACQUIRE DIVERSIFIED SPECIALISTS, INC.; CREATES $50 MILLION NON-PROMOTIONAL TOY SEGMENT

 SOUTH SAN FRANCISCO, March 19 /PRNewswire/ -- Lewis Galoob Toys, Inc. (NYSE: GAL, GALPR), today announced that it has signed a letter of intent to acquire Diversified Specialists, Inc. ("DSI"). In the proposed transaction, which is subject to execution of a definitive agreement, Galoob will purchase all of the capital stock of DSI. Financing will be provided through the two-year revolving credit facility committed by Congress Financial as reported by Galoob yesterday. The price and other terms of the proposed acquisition were not disclosed.
 DSI, headquartered in Houston, markets a broad line of non-promoted pre-school and juvenile electronic products, boys' activity toys and walkie talkies, among other products. DSI, which sells its products worldwide, concentrates on FOB Asia sales to the United States.
 Mark Goldman, president and chief executive officer of Galoob, stated, "DSI fulfills our strategic objective to add a substantial non-promoted toy segment to our promotional business. The management of DSI will continue to be responsible for DSI and, in addition, assume responsibility for managing Galoob's existing non-promoted company -- Toy Boys."
 Goldman continued, "We are particularly attracted to the synergy between the two companies. DSI brings to Galoob a highly successful, profitable company with excellent management, distribution, marketing and sales capabilities in the non-promoted toy business. Galoob gives DSI the opportunity to create non-promoted lines in support of Galoob's promoted toy business and brands such as Micro Machines(R), Z-Bots(TM) and future brands." Toy Boys and DSI sales combined exceeded $50 million in 1992. Galoob's promoted toy business sales were approximately $150 million in 1992.
 DSI Chief Executive Officer Tommy Moss said of the acquisition, "We are very excited with the prospect of joining the Galoob team. Our expertise in the non-promoted toy business, coupled with Galoob's Toy Boys business, creates an outstanding opportunity for us to more fully exploit our markets. Today, toy retailers want good merchandise at lower price points and better margins. That is what DSI provides. Our executive management team, including Richard Neitz, president, and Richard McNeely, executive vice president, brings an enormous amount of energy and marketing acumen to the Galoob family."
 Galoob designs, develops, markets and sells quality toys and video game accessories worldwide.
 -0- 3/19/93
 /CONTACT: Bill Catron or Mark Shepherd of Galoob, 415-952-1678; or Rita Blomberg or Barry Schwartz of Schwartz Public Relations Associates, 212-677-8700, for Galoob/
 (GAL)


CO: Lewis Galoob Toys, Inc.; Diversified Specialists, Inc. ST: California, Texas IN: HOU SU: TNM

GK-OS -- NY019 -- 7851 03/19/93 11:10 EST
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Publication:PR Newswire
Date:Mar 19, 1993
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