MONTREAL–Mega Brands Inc. disclosed Wednesday it intends to sell the American-based stationery and crafts business it acquired in mid-2005 for US$350 million.
The segment, primarily under the Rose Art brand, generated sales of about $200 million last year, producing pens and pencils, presentation boards and organizers, and craft and activity sets.
“The sale of the company’s stationery and activities business is being considered as a means of generating meaningful cash proceeds to reduce its existing debt and allow the company to place increased focus on its core toy business,” Mega Brands CEO Marc Bertrand stated.
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“Our stationery and activities business has consistently delivered solid performance,” Bertrand added.
“This is a strong business with solid market positions in North America and we believe it would be an attractive acquisition to both strategic and financial buyers.”
Divesting the business would focus Mega Brands on its core toy business and provide a stronger and more flexible capital structure, the company said.
There is no assurance a transaction will result, Mega Brands added, but “in addition to several other unsolicited expressions of interest for the stationery and activities business, it has received a letter from the former owners of Rose Art expressing an interest in acquiring this business but providing no particulars.”
“This expression of interest is considered by the company in the context of its ongoing litigation initiated by the former Rose Art owners against the company.”
