Crown Crafts, Inc. Enters Into Developmental Toy/Feeding/Baby Care Category With Acquisition of Sassy®
December 18 2017 - 6:45AM
Hamco, Inc., a wholly owned subsidiary of Crown Crafts, Inc.
(NASDAQ-CM:CRWS), (“Crown Crafts” or the “Company”), today
announced the acquisition of the Sassy®-branded developmental toy,
feeding and baby care product line of Sassy 14, LLC (“Sassy”).
At closing, which was effective after the close
of business on Friday, December 15, 2017, the Company paid a
preliminary purchase price of $6.5 million for the inventory,
intellectual property and certain other assets associated with the
Sassy product line and assumed certain related liabilities. The
final purchase price, which will be funded from a combination of
cash on hand and the Company’s existing revolving credit facility,
is subject to adjustment pending the completion of the final
inventory valuation. The acquisition is expected to
contribute approximately $11 million in net sales annually and to
be immediately accretive to earnings.
The Company plans to immediately integrate the
sourcing and sales of the Sassy product line into the Company’s
facility in Gonzales, Louisiana, while maintaining a product
development office in Grand Rapids, Michigan. Through the end
of fiscal year 2018, distribution will be provided by a third-party
facility in Grand Rapids, where the inventory is currently
located. In the first quarter of fiscal year 2019, the
Company anticipates a cost of approximately $200,000 to move the
remaining inventory to Compton, California, at which time
distribution will be integrated into the Company’s facility
there.
Sassy, based in Grand Rapids, Michigan, designs
innovative, developmental and sensory products that help provide a
solid foundation for lifelong learning. Founded in 1982, Sassy
became known for the breakthrough Sassy Seat® and later expanded
its line to include developmental toys, feeding and baby care
products, and disposables. Known as the original developmental
infant toy company, Sassy’s products include developmental toys,
playmats, crib and toy mirrors, bath toys and accessories, feeding
products, teethers, organizers and grooming items. Sassy products
are sold nationwide through mass-market and specialty retailers,
including Walmart, Target and Babies “R” Us. Sassy products are
also sold worldwide in approximately 30 countries. More information
can be found on www.sassybaby.com.
“The addition of Sassy’s well-known brand of
developmental baby products to Crown Crafts’ portfolio diversifies
our offerings and strengthens our position in the infant and
juvenile products market,” said E. Randall Chestnut, Chairman,
President and Chief Executive Officer of the Company. “Sassy
has been a dominant player in developmental toys, feeding and care
for more than 30 years and will complement our existing business
well. We are very excited about our opportunities for strategic
growth in this new category,” Chestnut continued.
“Sassy has always set itself apart by creating
innovative products that align with babies’ learning and
developmental milestones,” said Susan Hinshaw, who will join the
Company from Sassy as Senior Vice President of Marketing. “We are
very proud of the brand we’ve built and we are thrilled about our
opportunities for continued growth and expansion as part of the
Crown Crafts team.”
D.A. Davidson & Company acted as exclusive
financial advisor to Sassy on this transaction.
About Crown Crafts, Inc.
Crown Crafts, Inc., founded in 1957, is one of
America’s largest producers of infant bedding, toddler bedding and
bibs. Crown Crafts, Inc. operates through its three wholly-owned
subsidiaries, Crown Crafts Infant Products, Inc., Hamco, Inc. and
Carousel Designs, LLC. The Company’s subsidiaries 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, as
well as directly to consumers through www.babybedding.com. For more
information, visit the Company’s website at
www.crowncrafts.com.
Forward-Looking Statements
The foregoing contains forward-looking
statements within the meaning of the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Private Securities
Litigation Reform Act of 1995. Such statements are based upon
management’s current expectations, projections, estimates and
assumptions. Words such as “expects,” “believes,” “anticipates” and
variations of such words and similar expressions identify such
forward-looking statements. Forward-looking statements involve
known and unknown risks and uncertainties that may cause future
results to differ materially from those suggested by the
forward-looking statements. These risks include, among others,
general economic conditions, including changes in interest rates,
in the overall level of consumer spending and in the price of oil,
cotton and other raw materials used in the Company’s products,
changing competition, changes in the retail environment, the
Company’s ability to successfully integrate newly acquired
businesses, the level and pricing of future orders from the
Company’s customers, the extent to which the Company’s business is
concentrated in a small number of customers, the Company’s
dependence upon third-party suppliers, including some located in
foreign countries, customer acceptance of both new designs and
newly-introduced product lines, actions of competitors that may
impact the Company’s business, disruptions to transportation
systems or shipping lanes used by the Company or its suppliers, and
the Company’s dependence upon licenses from third parties.
Reference is also made to the Company’s periodic filings with the
Securities and Exchange Commission for additional factors that may
impact the Company’s results of operations and financial condition.
The Company does not undertake to update the forward-looking
statements contained herein to conform to actual results or changes
in our expectations, whether as a result of new information, future
events or otherwise.
Contact:
Olivia W. ElliottVice President and Chief Financial Officer(225)
647-9124oelliott@crowncrafts.com
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