Zapf Creation AG, Europe's leading manufacturer of play
and functional dolls, and US American toy manufacturer MGA
Entertainment Inc. reached a general agreement on a long-term joint
sales venture. The corresponding letter of intent was signed today.
According to the agreement, MGA will be granted exclusive sales rights for Zapf Creation products in the North and South American markets. In exchange, MGA will use Zapf Creation's sales channels to sell its products in major Continental European markets. The agreement has a term of ten years. Zapf Creation expects the joint sales venture to have a positive effect on the group's earnings.
Zapf Creation will also be able to use MGA Entertainment Inc. for its brands in the non-toy sector to expand its product range and target groups.
Both companies are currently exploring further areas of cooperation and negotiating ways of allowing MGA Entertainment shareholders to participate in potential capital measures taken by Zapf Creation AG. MGA Entertainment and related parties hold approx. a 20% stake in Zapf Creation share capital.
Dr. Georg Kellinghusen, CEO of Zapf Creation AG: "MGA Entertainment and Zapf Creation have no major overlaps in their core markets or products. This is why this comprehensive cooperation is very attractive for both sides. Zapf Creation has taken another step that will make sure that it returns to profitability without delay."
Isaac Larian, CEO of MGA ENTERTAINMENT: "This is good progress towards getting Zapf Creation on the right track. The synergies and the savings, as well as the income this deal will bring to Zapf Creation should be substantial. Also, there are additional areas where Zapf Creation could benefit from a strong partner like MGA in regards to sourcing, product costing and product design innovation. I hope that we will come to an agreement with regard to these areas very quickly."
Zapf Creation AG is Europe's leading brand manufacturer of play and functional dolls, as well as its accessories. Today's top selling brands are BABY born(R), which has been sold over 13 million times worldwide since 1991, Baby Annabell(R) and CHOU CHOU. All Zapf Creation brand concepts conform to the highest demands of design, quality, safety and play value. The company is represented worldwide with 8 subsidiaries in the United States, Europe as well as Asia. Zapf Creation, with headquarters in Rodental/Germany, employs 408 employees (31 Dec 05) worldwide and reported sales of 140.7 million EUR in fiscal year 2005. Zapf Creation AG, founded in 1932 by Max Zapf, was acquired in 1992 by TA Triumph-Adler AG and in April 1999 successfully introduced to the stock market (SDax:ZPF). For further information, please visit www.zapf-creation.com.
MGA Entertainment, a consumer entertainment products company headquartered in Van Nuys, California manufactures innovative lines of proprietary and licensed products, including toys and games, dolls, consumer electronics, home decor, stationery and sporting goods. BRATZ(TM) was introduced in June 2001, and has since become one of the World's premiere girls' lifestyle brands. The BRATZ brand is also noted for having won Family Fun magazine's Toy of the Year Award four years in a row. With over 400 Licensees worldwide, BRATZ brings together innovative companies and cutting-edge fashion styles to create exciting new products in apparel, footwear, fashion Accessories, entertainment and so much more. Please visit: www.mgae.com, www.bratz.com
According to the agreement, MGA will be granted exclusive sales rights for Zapf Creation products in the North and South American markets. In exchange, MGA will use Zapf Creation's sales channels to sell its products in major Continental European markets. The agreement has a term of ten years. Zapf Creation expects the joint sales venture to have a positive effect on the group's earnings.
Zapf Creation will also be able to use MGA Entertainment Inc. for its brands in the non-toy sector to expand its product range and target groups.
Both companies are currently exploring further areas of cooperation and negotiating ways of allowing MGA Entertainment shareholders to participate in potential capital measures taken by Zapf Creation AG. MGA Entertainment and related parties hold approx. a 20% stake in Zapf Creation share capital.
Dr. Georg Kellinghusen, CEO of Zapf Creation AG: "MGA Entertainment and Zapf Creation have no major overlaps in their core markets or products. This is why this comprehensive cooperation is very attractive for both sides. Zapf Creation has taken another step that will make sure that it returns to profitability without delay."
Isaac Larian, CEO of MGA ENTERTAINMENT: "This is good progress towards getting Zapf Creation on the right track. The synergies and the savings, as well as the income this deal will bring to Zapf Creation should be substantial. Also, there are additional areas where Zapf Creation could benefit from a strong partner like MGA in regards to sourcing, product costing and product design innovation. I hope that we will come to an agreement with regard to these areas very quickly."
Zapf Creation AG is Europe's leading brand manufacturer of play and functional dolls, as well as its accessories. Today's top selling brands are BABY born(R), which has been sold over 13 million times worldwide since 1991, Baby Annabell(R) and CHOU CHOU. All Zapf Creation brand concepts conform to the highest demands of design, quality, safety and play value. The company is represented worldwide with 8 subsidiaries in the United States, Europe as well as Asia. Zapf Creation, with headquarters in Rodental/Germany, employs 408 employees (31 Dec 05) worldwide and reported sales of 140.7 million EUR in fiscal year 2005. Zapf Creation AG, founded in 1932 by Max Zapf, was acquired in 1992 by TA Triumph-Adler AG and in April 1999 successfully introduced to the stock market (SDax:ZPF). For further information, please visit www.zapf-creation.com.
MGA Entertainment, a consumer entertainment products company headquartered in Van Nuys, California manufactures innovative lines of proprietary and licensed products, including toys and games, dolls, consumer electronics, home decor, stationery and sporting goods. BRATZ(TM) was introduced in June 2001, and has since become one of the World's premiere girls' lifestyle brands. The BRATZ brand is also noted for having won Family Fun magazine's Toy of the Year Award four years in a row. With over 400 Licensees worldwide, BRATZ brings together innovative companies and cutting-edge fashion styles to create exciting new products in apparel, footwear, fashion Accessories, entertainment and so much more. Please visit: www.mgae.com, www.bratz.com