Grand absorbs Wham-O
By Staff -- Gifts and Dec, 2/14/2008 7:43:00 AM
HONG KONG—Grand Toys International Ltd. said today it has signed an agreement to acquire outdoor toy maker Wham-O Inc. for approximately $35 million and 100 percent of the shares of two Grand subsidiaries, in a move the troubled toy maker will use as the base of a rebuilding effort.
The proposed acquisition of Wham-O will give Grand Toys “a platform on which to build a world-class branded outdoor products, leisure products and specialty toy company with a suite of recognized brands that have significant potential for growth in international markets,” the company said in a statement released today.
Grand’s position in the U.S. specialty toy business—and of late its only remaining U.S. toy business—will continue to come through its wholly owned International Playthings division, based in Parsippany, N.J.
Grand is purchasing Wham-O from Cornerstone Strategic Management Ltd., a company owned and controlled by Raylin Hsieh, the wife of Grand Toys’ major shareholder, Jeff Hsieh. As a part of its planned transaction, Grand Toys will give all of the shares of its low margin, non-core Hua Yang and Kord manufacturing businesses to Cornerstone. The inter-company liabilities between Grand Toys, Hua Yang and Kord will be written off at closing of the transaction.
"The new board of directors of Grand Toys, which was assembled in mid-2007, has been focusing on developing a new direction and strategy for Grand Toys to give the company a platform for growth," said David Howell, CFO of Grand Toys. "We believe the acquisition of Wham-O represents a transformational opportunity for Grand Toys and it will become the key asset around which we will build our business. In addition, the divestiture of the low margin, non- core Hua Yang and Kord manufacturing businesses frees up significant working capital for the company and allows us to reduce substantially our bank debt, creating a much healthier balance sheet."
Wham-O is said to have had annual sales of approximately $50 million in fiscal 2007. The company’s lines include Frisbee flying discs, Slip ‘N Slide water toys, Hula Hoop, Morey Boogie, Snow Boogie and BZ Pro boards.
Cornerstone announced its purchase of Wham-O from Charterhouse Group, a New York-based private-equity firm, in January 2006.
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