Mega Bloks builds on its stationery and activity growth strategy with acquisition of The Board Dudes
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 commented. "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 filings. 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 http://www.megabloks.com . Trademarks indicated by (R) and TM are owned by Mega Bloks, Rose Art or The Board Dudes.
SOURCE MEGA BLOKS INC.
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