Russ Berrie Exploring Strategic Options
The children’s consumer company may attract interest from private equity buyers, as firms increasingly examine the sector.
May 28, 2009
Russ Berrie and Company, Inc., the infants and kids consumer products company, is exploring strategic alternatives, which may include a sale or divestiture of select assets.
The Oakland, New Jersey-based company said it would examine “a full spectrum” of strategic alternatives to address its present challenges. It was only a year ago that the company was a buyer in the market, as it acquired infant furniture and bedding supplies companies LaJobi Industries and CoCaLo for a total of $63 million. However, in December, Russ Berrie unloaded its gift business, and subsequently recieved inquiries on its remaining assets.
In a first quarter conference call earlier in May, Russ Berrie president and chief executive Bruce Crain alluded to these inititives and the pressure it has caused. He cited that the acquisitions and sales represented "positive steps" in repositiioning the business but conceded that the moved "create a complex investment story over the past coupe of years."
For the first quarter, the company posted sales of $56.3 million, with gross profit of $16.9 million.
The private equity space could be one likely destination for the company. Harvest Partners, for instance, has invested in the space previously, backing Evenflo Co., while Blackstreet Capital Partners, last year, acquired infant furtiture maker Simplicity out of bankruptcy.
Russ Berrie was trading at $3.55 a share as of press time, representing a market cap of $74 million.
Russ Berrie and Sagent Advisors did not return calls seeking comment.
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