Russ Berrie Sells Gift Business to Encore
Both to Change Names
By Staff -- Gifts and Dec, 12/23/2008 3:21:00 PM
Oakland, NJ — Gift and juvenile product vendor Russ Berrie and Company sold its gift business to The Encore Group Inc., a privately held giftware company.
Encore acquired the stock of all of Russ Berrie’s active worldwide gift segment subsidiaries, as well as certain other assets of the gift business. In exchange, Encore gave Russ a 19.9 percent stake in its newly consolidated gift business, plus a promissory note for $19 million that matures in December 2013 and earns interest at an annual rate of 6 percent. In addition, Encore has retired the company’s gift credit line with LaSalle Bank.
Russ will retain its “Russ” and “Applause” brands, which will be licensed exclusively to Encore for five years for a fixed annual royalty payment of approximately $1.2 million. Encore will have the right to purchase these brands upon expiration of the license term, and Russ will have the right to require Encore to purchase the brands at the end of the license term, for an aggregate purchase price of $5 million.
Russ Berrie plans to stop using its current corporate name within 180 days, subject to shareholder approval. The combined Encore and Russ gift business will be known as The Russ Companies Inc. and will operate immediately under the Russ tradename.
Bruce G. Crain, CEO and president of Russ Berrie and Company, said in a statement, “Together with our prior acquisitions, the gift divestiture represents a transformational milestone that will enable us to focus our efforts on the attractive infant and juvenile market, while retaining a minority investment in the gift industry.”
Eldridge (Redge) Hanes, chairman of The Encore Group, said in a statement, “We believe this business is an excellent strategic fit for Encore, particularly due to complementary product lines and distribution channels. We also anticipate significant cross-selling opportunities, as we incorporate the Russ expertise with plush products and international reach with our existing business which has primarily focused on hard goods gift products. In addition, we will maintain the Russ operations in New Jersey and we expect to prudently integrate the businesses.”
Sagent Advisors served as financial advisor to Russ Berrie and Company and RBC Capital Markets served as financial advisor to Encore in connection with this transaction.
I ONLY HOPE THAT THE TWO COMPANIES START USING THE ALICES BEAR SHOP BRAND AGAIN
NOT THAT LADY CAN DESIGN AND PUT RUSS WHERE IT USED TO BE.GUESS WHAT SHE IS A MUM AND DOES NOT SIT IN AN IVORY TOWER
AT THE TOP
lynn fordham - 2009-01-17 04:11:00 EST
NOT THAT LADY CAN DESIGN AND PUT RUSS WHERE IT USED TO BE.GUESS WHAT SHE IS A MUM AND DOES NOT SIT IN AN IVORY TOWER
AT THE TOP
You have to be kidding me! Russ Berrie, a well run, creative, exciting and innovative company has sold it's gift business to Encore, a company which hasn't had an original (or successful) idea in years.
Russ is one of my most successful "third party" lines and I sure hope the Encore management team has hired new talent or has employed all the creative talent from Russ. If not I will soon be looking for a new "major" line for my store.
Mike Mayer - 2009-01-05 22:10:00 EST
Russ is one of my most successful "third party" lines and I sure hope the Encore management team has hired new talent or has employed all the creative talent from Russ. If not I will soon be looking for a new "major" line for my store.
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