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With two buys, Russ Berrie beefs up baby biz

By Staff -- Gifts and Dec, 4/2/2008 12:49:00 PM

OAKLAND, N.J.—Gift and juvenile product manufacturer Russ Berrie and Company Inc. is acquiring two infant/juvenile products companies: furniture maker LaJobi Industries Inc. and bedding and accessories firm CoCaLo Inc.

Cranbury, N.J.-based LaJobi Industries, with 2007 net sales of $54.3 million, will be bought by LaJobi Inc., a newly formed, indirect subsidiary of Russ Berrie, for $47 million, plus or minus a working capital adjustment, and potential additional earn-outs of up to $15 million. LaJobi Inc. will enter into a three-year employment agreement with Lawrence Bivona, LaJobi Industries’ co-founder, CEO and president, while its other co-founder, Joseph Bivona, will serve as a business consultant through 2008.

I&J HoldCo Inc., another newly-formed subsidiary of Russ Berrie, will acquire all of the capital stock of CoCaLo Inc. for $16 million, plus or minus a working capital adjustment, and potential earn-outs of up to $4 million. The Costa Mesa, Calif.-based infant bedding and accessories producer distributes its products under the CoCaLo Baby, CoCaLo Couture and Baby Martex brands. Renee Pepys-Lowe, CoCaLo’s founder and president, will enter into a three year employment agreement with I&J HoldCo.

"We plan to maintain the individual brand identities and management structures of both LaJobi and CoCaLo, while building on the strengths of these companies," said Bruce G. Crain, Russ' president and CEO. "We are enthusiastic about the potential growth prospects at both LaJobi and CoCaLo through product and distribution channel expansion."

Russ also plans to expand its existing infant and juvenile segment credit facility to provide for up to $175 million in senior bank financing, in order to finance the acquisitions of LaJobi and CoCaLo and “provide additional financial flexibility,” the company said in a statement.

The purchases follow a 2007 during which net sales grew 12.4 percent to $331.2 million compared to the prior year. Sales were driven by a nearly 11 percent jump in the company's infant and juvenile products business and nearly 14 percent in its giift segment, home to its Shining Stars plush.

Consolidated gross profit for the year wer $125.4 million compared to $118.1 million in the same period in 2006. 2007's profit would have been an additional $10 million higher had it not been for an impairment charge.

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Russ Berrie to Acquire LaJobi, CoCaLo

Apr 2, 2008

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