Search form

Nelvana Nabs Klutz Publishing

On Wednesday, April 12, 2000, Nelvana Limited announced it has acquired privately held Klutz, one of the leading branded children's book publishers in the U.S., for US$74 million. The Toronto-based company plans to integrate Klutz into Nelvana's Branded Consumer Products business, which includes established operations in publishing and merchandise licensing. Under the terms of the agreement, Nelvana will acquire 100% of the stock of Klutz. Approximately $63 million of the total purchase price will be payable in cash at closing, approximately $5 million in Nelvana subordinate voting shares and approximately $6 million in subordinated notes payable to the selling shareholders of Klutz. Nelvana currently intends to pursue a public offering of its subordinate voting shares in the second quarter of 2000. The producer of FRANKLIN and BABAR intend to use a portion of the proceeds from that offering to pay for the acquisition of Klutz. John Cassidy, president and CEO of Klutz, will sign a multi-year employment agreement with Nelvana at closing, and is expected to join Nelvana's Board of Directors. Cassidy will continue to be responsible for the day-to-day operations of Klutz, based at its Palo Alto, California office. Klutz was a pioneer in packaging instructional books with activity products for children. In 1977, the publisher first released JUGGLING FOR THE COMPLETE KLUTZ, a book with three beanbags attached. Klutz has sold in excess of 50 million books and related products in 13,500 stores around the world, ranging from popular retail chains to independent specialty outlets. Klutz boasts 22 consecutive years of profitable performance, with 125 products distributed to the marketplace in 1999. Many of its books have appeared on Publisher's Weekly and The New York Times children's best-sellers list, and several parenting publications and organizations have honored the company's products with editorial awards. "This transaction is part of our ongoing strategy to broaden Nelvana's children's entertainment platform and to increase contribution from our Branded Consumer Products business," explains Michael Hirsh, Co-Chief Executive Officer of Nelvana. Cassidy said, "Nelvana and Klutz make a lovely couple. Nelvana's experience in animation, and its demonstrated ability to produce quality television programming, presents us with an exciting new creative sandbox, plus a powerful new brand-building channel. We also intend to take advantage of its international relationships to expand our own global sales efforts, as well as Nelvana's expertise in preschool to extend the demographic appeal of our products. Klutz and Nelvana share an identical vision about children -- quality, education and entertainment. We look forward to fusing our strengths and together building something across a variety of media that will be very special indeed." A day after the announcement Nelvana's stock raised 8%, finishing the day at CA$32.55 (US$22.29).

Rick DeMott's picture

___________
Rick DeMott
Animation World Network
Director of Content
Creator of Rick's Flicks Picks