MONTREAL, March 5 /CNW Telbec/ - MEGA Brands Inc. (TSX: MB) (the
''Company'') today announced that following a comprehensive strategic review,
it intends to explore a sale of its Stationery and Activities business. The
Company believes that this initiative will bring significant benefits:
- Focus MEGA Brands on its core toy business, leveraging its strengths
and innovation culture
- Dedicate resources and management's attention to creating value through
the execution of the Value Enhancement Plan
- Provide the Company with a stronger and more flexible capital structure
"As previously announced in December, 2007, the Company has been pursuing
a Value Enhancement Plan to enhance shareholder value and respond to market
challenges. The sale of the Company's Stationary 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," said Marc Bertrand, President and CEO of MEGA Brands. "Our
Stationery and Activities business has consistently delivered solid
performance. 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."
Stationery and Activities is a leading participant in the North American
school supplies and arts & crafts markets. Product lines are comprised of art
materials (crayons, colored pencils, highlighters and markers) sold mainly
under the ROSE ART brand; writing instruments (pens, mechanical pencils and
wood case pencils) sold mainly under the ROSE ART, SRX and USA GOLD brands;
dry-erase and cork presentation boards, organizers and accessories sold mainly
under the BOARD DUDES brand, and ROSE ART craft and activity sets. The
business generated sales in excess of $200 million in 2007.
There can be no assurance that the evaluation process initiated by the
Company will result in a transaction, or that it will be completed in a
specific time frame.
Separately, the Company acknowledges that 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.
About MEGA Brands
MEGA Brands is a trusted family of leading global brands in construction
toys, games & puzzles, arts & crafts and stationery. We offer engaging
creative experiences for children and families through innovative,
well-designed, affordable and high-quality products that deliver on our
Creativity to the Rescue promise. For more information, please visit
The MEGA logo, Creativity to the Rescue, MEGA BLOKS, ROSE ART, MAGNETIX,
BOARD DUDES and MAGNEXT are trademarks of MEGA Brands Inc. or its affiliates.
All statements in this press release that do not directly and exclusively
relate to historical facts constitute "forward-looking statements". These
statements represent the Corporation's intentions, plans, expectations and
beliefs. In certain instances, these statements require us to make assumptions
and there is significant risk that these assumptions may not be correct.
Furthermore, these statements are subject to risks, uncertainties and other
factors, many of which are beyond the Corporation's control. The Corporation
disclaims any intention or obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, other than as required by applicable legislation. Readers
are cautioned not to place undue reliance on these forward-looking statements.
More information about the risks that could cause our actual results to
significantly differ from our current expectations can be found in the "Risks
and Uncertainties" section of our 2006 and third quarter 2007 MD&A.
For further information:
For further information: Analysts and investors: Eric Phaneuf, (514)
333-5555 ext. 2538, firstname.lastname@example.org; Media: Harold Chizick, (514)
333-5555 x2338, email@example.com