Spin Master Corp., the children’s entertainment company, acquired Swimways Corporation, a leader in the water and outdoor sports category, aiding in the formation of an outdoor business segment. The acquisition establishes Spin Master as a key player in the Outdoor and Sports Toys category – currently one of the largest and fastest growing categories in the US toy industry as measured by NPD.
Swimways, headquartered in Virginia Beach, VA, with an office in Guangzhou, China, a manufacturing and distribution facility in Tarboro, NC and a team of 149 employees, has a diverse portfolio of toys, games and sporting goods for the pool, beach and backyard with stable and consistent performance. Swimways’ 2015 gross sales were approximately $90 million. These products are sold under the brands Swimways, Kelsyus and Coop, and include the popular, patented Spring Float line of products, complemented by pool category licenses from a number of popular entertainment franchises. Swimways’ experienced leadership team will lead Spin Master’s Outdoor segment from its current headquarters.
“Spin Master is committed to growth through diversification, innovation, expanding our global presence and making strategic acquisitions. With the Swimways acquisition, we can do all of these. We are well-equipped to significantly grow Swimways’ brands both domestically and internationally through our strong retail relationships and global sales network, while leveraging our internal innovation expertise and our network of inventors around the world to develop new products,” said Ben Gadbois, president and COO, Spin Master Ltd.
“We’re excited to join the Spin Master family today. This will allow Swimways and its brands to grow and expand by harnessing Spin Master’s global infrastructure,” said Swimways Corporation President, David Arias, whose family has owned the company for more than two decades. “We share a spirit of innovation, expertise in maximizing licensing partnerships and a commitment to quality that will provide a strong foundation for growth moving forward.”
“Our growing presence in the Outdoor category delivers on several key business strategies including the opportunity to drive sales throughout the year, outside of the seasonality traditionally associated with toys and games. This will allow us to maximize our operational infrastructure during the non-toy selling season,” said Anton Rabie, Spin Master’s co-CEO and co-Founder. “We are passionate about the category and look forward to inspiring an active lifestyle by infusing Spin Master’s innovation and fun into the outdoors in order to satisfy many parents’ preference for healthier lifestyles and more creative outdoor play.”
The purchase price for the transaction will be satisfied by $85 million in cash on closing, less an escrow for possible adjustments, plus up to $8.5 million payable over 4 years based on Swimways’ sales growth. The transaction was financed through Spin Master’s existing credit facility. Swimways will operate as a standalone subsidiary within the Spin Master group.
The announcement marks Spin Master’s fifth acquisition since its Initial Public Offering in July 2015. In Q4 2015, Spin Master completed the purchase of Cardinal Industries, a leader in games and puzzles for more than 60 years. Spin Master subsequently acquired Editrice Giochi SRL, the Italian games producer, Etch-a-Sketch and Doodle Sketch from The Ohio Art Company in Q1 2016 and global mobile digital app companies Toca Boca and Sago Mini from Bonnier Group in Q2 2016.