MALIBU, Calif. - April 20, 2004 - JAKKS Pacific, Inc. (Nasdaq: JAKK) today announced that it has reached an agreement in principle to acquire substantially all of the assets of the Play Along companies. The privately-held toy companies based in Deerfield, Florida manufacture traditional toys, including plush, dolls, action figures and preschool and construction toys, and holds a number of licenses including Cabbage Patch Kids® for dolls, Care Bears® for plush and preschool learning, Teletubbies® for preschool and playsets and DC Comic's Batman® and Justice League® for construction toys. Consideration for the acquisition is anticipated to be up to $116 million, consisting of $75 million in cash, approximately $11 million of JAKKS common stock and an earn-out of up to an aggregate amount of $30 million through 2007, based on the achievement of certain financial performance criteria. Based on preliminary unaudited results of calendar year 2003, Play Along reported approximately $160 million in revenue and approximately $30 million in pre-tax earnings. The parties expect to complete the transaction during the second quarter of 2004. Play Along, which will be operated as a wholly-owned subsidiary of JAKKS Pacific and will continue to be based out of Florida and Hong Kong, is expected to significantly increase future sales and earnings of JAKKS after the transaction closes.
"We believe that Play Along, with its product lines and strong management team, will be a valuable addition to JAKKS' portfolio of brands across multiple product categories" commented Jack Friedman, chairman and CEO, JAKKS Pacific. "We have worked very hard over the past five years to build Play Along into a dynamic force in the toy industry," commented Charlie Emby, President of Play Along. "The combination of Play Along and our great classic brands, along with the outstanding brands in JAKKS Pacific's portfolio, should make JAKKS Pacific an even stronger company in the future."
"Play Along will continue as a subsidiary of Jakks Pacific out of our Deerfield Beach headquarters, thus there will be no negative effect on any of our lines. We will continue to move forward - and fans of lines including AOME and C3 will have lots to look forward to from us in the upcoming months." |