Spin Master Completes Acquisition of Melissa & Doug, A Trusted Brand in Early Childhood Play

The highly strategic and complementary acquisition will bolster Spin Master's position in the children's entertainment industry

All references in US$, unless otherwise noted

TORONTO, Jan. 2, 2024 /PRNewswire/ - Spin Master Corp. ("Spin Master" or the "Company") (TSX: TOY), a leading global children's entertainment company, today announced it has completed its previously announced acquisition of U.S.-based Melissa & Doug, a well-recognized and trusted brand in early childhood play, for $950 million.

With a mission to ignite imagination and a sense of wonder in children, Melissa & Doug is a beloved brand that is sought after and trusted by parents and children alike and highly relevant for families seeking sustainable wooden toys and screen-free play.

"This acquisition brings together two formidable leaders in the toy industry, both driven by a passion to create magical play experiences for children and inspire imaginations on a global scale," said Max Rangel, Spin Master's Global President and CEO. "By adding Melissa & Doug's complementary product line to our existing toy portfolio we expand our capabilities in early childhood play and further bolster Spin Master's leadership in the children's entertainment industry. Our combined expertise, and the addition of Melissa & Doug's high-quality, open-ended, creative and developmental toys, positions both Spin Master and Melissa & Doug to unlock further growth across new and existing channels and in markets globally."

The transaction expands Spin Master's reach in specialty retail and e-commerce channels, and provides a recurring, evergreen product portfolio with a diverse revenue base and significant long-term growth opportunities. As part of the closing of the transaction, the parties have agreed to eliminate the additional contingent earnout consideration of up to $150 million, previously announced on October 11^th.

Advisors

Evercore, TD Securities and RBC Capital Markets served as financial advisors to Spin Master. HSBC Bank, TD Bank and Royal Bank of Canada as Joint Lead Arrangers provided debt financing specific to funding the Acquisition, supplemental to the company's Credit Facility. Torkin Manes LLP and Pillsbury Winthrop Shaw Pittman LLP served as legal counsel. Harris Williams & Co acted as financial advisor and Fried, Frank, Harris, Shriver & Jacobson LLP served as legal counsel to Melissa & Doug.

For more information, the investor presentation is available at https://www.spinmaster.com/en-US/corporate/investor-relations/.

Spin Master Corp. (TSX: TOY) is a leading global children's entertainment company, creating exceptional play experiences through its three creative centres: Toys, Entertainment and Digital Games. With distribution in over 100 countries, Spin Master is best known for award-winning brands PAW Patrol®, Bakugan®, Kinetic Sand®, Air Hogs®, Hatchimals®, Rubik's Cube® and GUND®, and is the global toy licensee for other popular properties. Spin Master Entertainment creates and produces compelling multiplatform content, through its in-house studio and partnerships with outside creators, including the preschool franchise PAW Patrol and numerous other original shows, short-form series and feature films. The Company has an established presence in digital games, anchored by the Toca Boca® and Sago Mini® brands, offering open-ended and creative game and educational play in digital environments. Through Spin Master Ventures, the Company makes minority investments globally in emerging companies and start-ups. With over 30 offices in close to 20 countries, Spin Master employs more than 2,000 team members globally. For more information visit spinmaster.com or follow-on Instagram, Facebook and Twitter @spinmaster.

Timeless Toys. Endless Possibilities.

From classic wooden toys to crafts and pretend play, Melissa & Doug products provide a launch pad to ignite imagination and a sense of wonder in all children so they can discover their passions and their purpose. Recognized by parents as a highly rated early childhood brand for wooden and sustainable toys, Melissa & Doug is committed to its vision of making timeless, sustainable toys for a thriving and inclusive world. Melissa & Doug is proudly partnering with the American Academy of Pediatrics to foster early brain development and to champion the health benefits of open-ended play through their joint Power of Play alliance.

SOURCE Spin Master Corp.