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JAKKS Pacific To Purchase Pen and Market Company
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Toy maker Jakks Pacific Inc. on Tuesday said it had agreed to buy speciality pen and marker manufacturer Pentech International Inc. for about $17.6 million in cash in a move to expand its product line and push into the craft, activities and stationery business.Under the terms of the deal, which is expected to close in the third quarter, Malibu, Calif.-based Jakks will pay $1.40 for each Pentech share, for a total of $17.6 million. Including Pentech debt to be assumed by Jakks, the purchase price comes to about $36.9 million, Jakks said. Pentech manufactures and markets more than 200 varieties of speciality pens, pencils, markers and related products under its own brand names and under license from third parties. Jakks said it plans to integrate the company into its Flying Colours division. ``We expect to quickly improve Pentech's operating margins by focusing on the expected synergies of the combined operations, and by focusing on its higher-margin items,'' Stephen Berman, Jakks' president and chief operating officer, said in a statement. ``One of the attractions of Pentech is its counter-cyclicality: Because a significant portion of its sales are in back-to-school supplies, which typically are shipped in the second quarter of the year, it can be expected to further stabilise Jakks' quarter-to-quarter financial performance.'' Pentech reported sales of $61 million for fiscal year 1999, and its balance sheet reflected assets of $30.5 million and liabilities of about $19.3 million as of March 31. [Posted 5/23/2000]
  
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