1st May 2008 07:01
Hornby PLC01 May 2008 HORNBY STRENGTHENS PRODUCT RANGE WITH £7.5M ACQUISITION OF CORGI Hornby Plc ("Hornby"), the international models and collectibles group, hastoday announced that it has acquired the famous die-cast model business CorgiClassics ("Corgi"). Hornby has agreed to buy the brand, tooling, andintellectual property rights from NASDAQ quoted Corgi International Limited, forcash consideration of £7.5 million. Fixed assets at completion had a book valueof c.£1.4 million. The balance of the consideration relates to Goodwill,Trademarks and Intellectual Property. In addition, existing inventory will beacquired for a consideration of c.£0.8 million, subject to a post-closingvaluation. The cash consideration will be funded from Hornby's bankingfacilities. Corgi is one of the oldest manufacturers of collectible die-cast models oftrucks, buses, cars and aeroplanes in the world. Corgi's famous model vehiclescaptured the imagination of millions of baby boomers and are now highlysought-after in the expanding collectibles market. Currently, its principalmarkets are the United Kingdom, the United States and Northern Europe. Corgi was established by the Mettoy Company in Northampton, which first startedto produce pressed metal toys in the 1930s. The Corgi brand for die-cast modelswas born in 1956 and at its height, was selling millions of toys a year,including the Batmobile, the Lotus John Player Special Formula 1 car and JamesBond's iconic Aston Martin DB5. More recently, production has been moved tolower cost plants in the Far East. Corgi enjoys an excellent reputationworldwide. Corgi sells a range of products based on aviation, commercial roadtransport and other vehicles. In the year to 31 March 2008 the acquired assets generated sales of c £6.5million. As Corgi formed part of Corgi International Limited it did not reportprofitability as a separate entity. However, performance in the year to 31 March2008 was disrupted by a number of one-off items. Hornby will focus on managingthe brand for growth. Key existing marketing, sales and development personnelwill be retained, whilst currently outsourced logistics will be integrated intothe Hornby structure along with sales administration, finance and operations. Itplans to strengthen the product range and improve the marketing and distributionsupport. The acquisition is expected to be earnings neutral in the currentfinancial year. The Corgi product range is highly complementary to Hornby's existing hobbybrands, which include Hornby, Lima, Jouef and Rivarossi in model railways,Scalextric slot car racing cars, Airfix models and Humbrol paints. As part of the acquisition, Hornby is also acquiring Bassett-Lowke, an 'O' gaugemodel railway brand. Bassett-Lowke operates at the top end of the model railwaymarket and will add another range of products that complements Hornby's existingmodel railway portfolio. Frank Martin, Chief Executive of Hornby commented, " We are delighted to announce the acquisition of Corgi. It is a fantastic brandand has a superb reputation worldwide. We intend to build on the brand's superheritage and invest to build its premier position in the market. The strategicfit with our existing businesses could not be better. We are confident that wewill grow the scale of the business rapidly and drive it forward. " The team at Hornby has the expertise and a successful track record in managinga portfolio of famous hobby sector brands that have flourished under ourstewardship. We have set in place a detailed integration plan to ensure that weimprove Corgi's performance rapidly. We will focus on product innovation,improving the distribution network and driving sales growth both in the UK andInternationally. " This acquisition is an extension of the Group's strategy to build aninternational hobby and collectibles business with a broad range of brands.Looking to the future, we are extremely excited by the potential growth thatCorgi can deliver." -ends- Date: 1 May 2008 For further information contact: Hornby Plc City Profile Frank Martin, Chief Executive Simon Courtenay Andrew Morris, Finance Director William Attwell Tel: 01843-233500 Tel: 020-7448-3244 Web: www.hornby.com or: www.scalextric.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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