Zindart Limited Acquires Corgi Classics Limited, A Leading UK Collectibles Company
29 July 1999
Zindart Limited Acquires Corgi Classics Limited, A Leading UK Collectibles Company
SAN FRANCISCO--July 28, 1999--Zindart Limited today announced the acquisition of Corgi Classics Limited ("Corgi") from its management and CINVEN, a U.K. venture capital firm. Zindart is a producer of quality collectibles, including scale model vehicles and holiday ornaments. Corgi is one of the oldest and fastest growing U.K. based producers of classic collectible scale model cars, trucks, buses and planes. Corgi is the leader in the U.K. collectibles market in these categories and also distributes its classic collectibles in Europe, the U.S. and Asia.Commenting on the acquisition, Robert A. Theleen, Chairman of Zindart, said, "We are pleased to link Zindart to the excellent Corgi brand of collectibles. An alliance with a superior, profit driven management team that has proven marketing skills and a history of product innovation in the collectibles area establishes important synergies with Zindart's manufacturing capabilities. Corgi enjoys a sterling reputation among collectors and enthusiasts from its origin in the 1930's to its reinvention in the 1990's by management into one of the premier European producers of collectibles. The existing management team will remain to further develop Corgi's classic collectibles for the global market."
Chris Guest, Chief Executive Officer of Corgi, remarked, "We expect the proven high quality manufacturing capabilities of Zindart to facilitate continued worldwide growth and expansion of the Corgi line, and increased brand-building opportunities. The reduction of product development lead times coupled with significantly improved quality will allow Corgi to provide more value to the collector and greater flexibility in reacting to new trends to satisfy our large and growing collector community."
Corgi started in 1956 producing die-cast scale replica cars, trucks and other vehicles as quality, realistic transportation playthings. Generations of people continue to play with and collect the growing line of transportation replicas. The Corgi brand name has enjoyed renewed prominence since a management buyout of Corgi in 1995, which focused on the nostalgic value of the line and the potential to create a collectibles market. Corgi is not a manufacturer, but relies on a variety of China based factories to produce its goods.
Corgi, located in Leicester, U.K., employs a total of 54 people between its U.K. and Hong Kong facilities. Corgi is the leader in the U.K. market with a comprehensive channel of distribution through retail, wholesale, direct mail and the Internet. There are over 300 Corgi retail outlets including 30 Collector Centers in the U.K. which carry the full line of Corgi's cars, trucks, buses, and airplane die-cast scale replica models. Corgi also sponsors a Corgi Classics Roadshow vehicle which can be seen at over 40 events a year and is visited by an estimated 1.5 million people every year. For more information on Corgi products, visit www.corgi.co.uk.
The purchase price for Corgi is approximately $46.4 million in cash, which will be provided by cash on hand of $16.4 million, as well as $30 million from bank facilities with ABN Amro Bank N.V., Rabobank, KBC Bank N.V. and Standard Chartered Bank. Corgi reported sales of $30.0 million, and EBITDA of $6.6 million for the twelve months ended March 31, 1999. Zindart expects that the acquisition will be accretive in fiscal year 2001 and after. Corgi is not currently a customer of Zindart, and management expects significant manufacturing synergies as a result of the acquisition.
Founded in 1978, and now over $100 million in revenues, Zindart produces and markets high-quality die-cast and injection-molded collectible products to major brandname companies in the United States, Europe, and Asia. In February 1998, it added complex, high-quality books and specialty packaging widely used with collectibles to its product mix. Zindart's strategy calls for further penetration of Western collectible markets by achieving greater critical mass and presence in the global sectors it serves through marketing to a broader range of collectible customers as well as highly selective investments in the collectible industry. Zindart is a Preferred Quality Supplier for Hallmark and a major supplier to Mattel and Ertl. For more information about Zindart, please see our website -- www.zindart.com.
Certain statements in this release are forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, in addition to those discussed above and without limitation, changes in market demand for the Company's products, changes in economic conditions, dependence on certain customers and other risks described in the Form 10-K for the fiscal year ended March 31, 1999. The company undertakes no obligation to revise these forward-looking statements to reflect subsequent events or circumstances.
Zindart prepares its financial results in U.S. dollars in accordance with U.S. GAAP.