Mega Bloks builds on its stationery and activity growth strategy with acquisition of The Board Dudes

Jan 24, 2006, 00:00 ET from MEGA BLOKS INC.

    MONTREAL, Jan. 24 /PRNewswire-FirstCall/ - Mega Bloks Inc. (TSX: MB)
 through its subsidiary Rose Art Industries, Inc has agreed to acquire The
 Board Dudes, Inc., a privately held company based in Corona, California.
     The Board Dudes designs and distributes an innovative range of products
 for the school, home and office supply markets. Primary product categories
 include dry erase boards, cork boards, foam boards, school and locker
 products, novelty items and storage products sold under the Board Dudes(R),
 Locker Dudes(TM) and related brands. These goods are sold in mass and
 specialty channels throughout the U.S. and Canada. The Board Dudes founders
 and principals, Ben Hoch and Michael Cerillo, will take on senior managerial
 roles within the stationery and activities division of Rose Art.
     "By acquiring The Board Dudes and retaining the services of its senior
 executives within our group, we are consolidating our position in the
 stationery business and adding depth and experience to our product
 development, operations and sales teams," said Lawrence I. Rosen, President
 and CEO of Rose Art. "Ben and Mike have the drive and focus it takes to stand
 out in this industry," he added.
     "Since starting our company, we have always taken pride in our ability to
 identify niche areas for business development and in our flair for designing
 products that are distinctive in the category. We can now bring our vision of
 marketing to a platform that can deliver on a worldwide scale, across all
 channels of trade," Ben Hoch and Michael Cerillo, founders of The Board Dudes
     "Our objective is to offer retailers and consumers a compelling value
 proposition in all our product categories. With this acquisition, we are
 building on our No. 2 position in the $300 million board market in the U.S.
 where we see strong growth potential going forward," stated Marc Bertrand,
 President and CEO of Mega Bloks. "These new brands nicely complement our award-
 winning back-to-school and stationery product offerings, as well as our
 customer base."
     The purchase price paid by Rose Art is US$17 million subject to certain
 adjustments and will be financed through existing credit facilities.
 Contingent consideration to the selling principals of up to US$7 million is
 payable between 2006 and 2009 depending on the attainment of certain
 performance targets. The transaction is expected to be accretive to earnings
 in 2006 and to close within the current quarter. Mega Bloks is being advised
 on the acquisition by BMO Nesbitt Burns.
     This press release contains forward-looking statements related to
 expected future events and financial and operating results of the Company that
 involve risks and uncertainties. Actual results may differ materially from
 management expectations as projected in such forward-looking statements for a
 variety of reasons, including market and general economic conditions and the
 risks and uncertainties detailed from time to time in the Company's SEDAR
     About The Mega Bloks Group:
     The Mega Bloks Group of companies is a leader in providing play and
 learning products to children and adults of all ages under the MEGA BLOKS(R)
 and ROSE ART(R) brands. The Group produces high quality construction and
 magnetic toy sets, arts and crafts, stationery, school supplies, writing
 instruments and activity products. The Group is headquartered in Montreal with
 sales in over one hundred countries. For more information, please visit .
     Trademarks indicated by (R) and TM are owned by Mega Bloks, Rose Art or
     The Board Dudes.