Crown Crafts acquires Manhattan toy largest toy distributor and a leading creator of developmental toys for early childhood. The acquisition expands and complements Crown Crafts’ toy offerings, customer base and international business.
Today, Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the “Company”) announced that it has acquired Manhattan Group, LLC, doing business as Manhattan Toy, and its wholly-owned subsidiary Manhattan Toy Europe. The Crown Crafts Manhattan toy deal expands Crown Crafts’ presence in the growing category of developmental toys for infants and toddlers. Manhattan Toy Company’s product offerings of plush dolls and wooden toys will complement Crown Crafts’ existing line of Sassy toys.
What the CEO’s have to say?
After Crown Crafts acquires Manhattan Toy, largest toy distributor, Olivia W. Elliott, President and CEO of Crown Crafts had this to say, “Manhattan Toy adds new and exciting products to our portfolio, expands our customer base and opens up new distribution channels, including international expansion. We are greatly impressed with Manhattan Toy’s operations and its excellent design team and welcome them to the Crown Crafts team.”
Nora Quinlan O’Leary, President of Manhattan Group said, “We are proud of our reputation as a pioneer in the developmental toy category and all that our talented team has accomplished. We are also pleased that Crown Crafts shares our vision, and we are excited about the new growth opportunities this acquisition will bring.”
Crown Crafts Acquires Manhattan toy, largest toy distributor.
Crown Crafts acquires Manhattan Toy, largest toy distributor and the purchase price for the acquisition of Manhattan Toy Company is $17 million and is subject to customary working capital adjustments. Crown Crafts Manhattan toy deal was funded by a combination of cash on hand and proceeds from the Company’s line of credit. The term of the line of credit has been extended from July 2025 to July 2028 and its borrowing capacity increased from $26 million to $35 million.
The Manhattan Toy Company acquisition is expected to be accretive to earnings and will add approximately $24 million annually to the Company’s net sales. Following the acquisition, the toy category will become the largest product category within the Company’s business, representing approximately 40% of overall net sales.
Manhattan Toy is based in Minneapolis, Minnesota, with a distribution facility in Eden Valley, Minnesota, and its European subsidiary is based in the United Kingdom. Crown Crafts intends to continue operations at both offices and at the distribution facility.
According to a report from Fortune Business Insights, the global educational toy market was approximately $65 billion in 2020, including $25 billion in North America. Motor skill toys represented the largest share of the global market, which is forecast to grow at a near-double-digit rate through 2028.
“This acquisition is the latest step in our long-term strategic plan, which includes expanding in the toy category, expanding our product offerings both organically and through acquisition, increasing our direct sales to consumers, reducing operating costs, and making further investments to enhance our technology and improve our organizational structure,” Elliott said. “We will continue to pursue our strategy as we look for additional opportunities for profitable growth.”
D.A. Davidson & Company acted as exclusive financial advisor to Manhattan Toy on this transaction.
About Crown Crafts, Inc.
Crown Crafts, Inc. was founded in 1957, and is one of America’s largest producers of infant bedding, toddler bedding, bibs, toys and disposable products. The Manhattan Toy Company operates through its two wholly-owned subsidiaries, NoJo Baby & Kids, Inc. and Sassy Baby, Inc., which market a variety of infant, toddler and juvenile products under Company owned trademarks, as well as licensed collections and exclusive private label programs. Sales are made directly to retailers such as mass merchants, large chain stores and juvenile specialty stores.
About Manhattan Toy Company
Manhattan Toy Company offers a wide variety of toys, dolls, plush products and games designed to help young children learn through the experience of play. It has award-winning portfolio that includes more than 500 products ranging from wooden toys to activity centers and books.
