GONZALES, La. - Crown Crafts , Inc. (NASDAQ-CM: NASDAQ:CRWS), a prominent infant and toddler product company, has announced the acquisition of substantially all assets of Baby Boom Consumer Products, Inc., a key player in the toddler bedding and diaper bag markets. The purchase, valued at $18 million, is anticipated to augment Crown Crafts' annual net sales by approximately $20 million.
The transaction, finalized today, was financed through a mix of an $8 million term loan and additional funds from Crown Crafts' revolving line of credit, which also saw an increase in borrowing capacity from $35 million to $40 million. The term loan is set to be repaid monthly over four years, and the credit line's term has been extended to July 19, 2029.
Chief Executive Officer of Crown Crafts, Olivia Elliott, expressed enthusiasm for the expansion of their product line, highlighting the strategic fit of Baby Boom's licensed products, which include popular brands such as Bluey, Ms. Rachel, Cocomelon, and Paw Patrol. Elliott anticipates that the integration of Baby Boom's offerings will enhance Crown Crafts' position in the toddler bedding segment and mark their entry into the diaper bag category.
Steven Betesh, President of Baby Boom, echoed the sentiment, expressing confidence in Crown Crafts as the right partner to foster growth for their products in the market. D.A. Davidson & Co. served as the financial advisor, while Smith, Gambrell & Russell, LLP provided legal counsel to Crown Crafts during the transaction. The CIT Group (NYSE:CIT) facilitated the debt financing, and Sills, Cummis & Gross P.C. acted as legal advisor to Baby Boom.
Crown Crafts, established in 1957, operates through its subsidiaries, NoJo Baby & Kids, Inc. and Sassy Baby, Inc., offering a wide range of infant, toddler, and juvenile products. Baby Boom, founded in 1988 and headquartered in Newark, New Jersey, brings to the table a portfolio that includes diaper bags, crib bedding, baby blankets, nursery décor, travel accessories, and soft bath products.
This news is based on a press release statement from Crown Crafts, Inc.
In other recent news, Crown Crafts, Inc. reported increased net sales in Q4 of its fiscal year 2024, reaching $22.6 million, with a significant contribution from Manhattan Toy. The company's net income for the quarter was $1 million, while the full year's net sales totaled $87.6 million, resulting in a net income of $4.9 million for the year. Crown Crafts also highlighted a reduction in debt and continued payment of cash dividends to shareholders.
In recent developments, Crown Crafts is planning to expand its product lines, explore strategic acquisitions, and enhance direct-to-consumer sales channels. The company is also expecting a boost in international sales prospects with the opening of three new Legoland parks.
However, the company acknowledged increased marketing and administrative expenses due to the addition of Manhattan Toy and a decline in Manhattan Toy sales due to customer bankruptcy and discontinued shipments to those with poor credit. Despite these challenges, Crown Crafts is focused on reducing inventory levels and improving costs.
InvestingPro Insights
Crown Crafts, Inc.'s (NASDAQ-CM: CRWS) strategic acquisition of Baby Boom Consumer Products is poised to expand its market presence, and the financial health of the company supports this growth initiative. With a solid Market Cap of $50.11M, Crown Crafts operates with a competitive edge in the infant and toddler product industry.
The company's commitment to shareholder value is evident with a notable Dividend Yield of 6.58%, a testament to its financial stability and a strong incentive for investors seeking regular income. This is further bolstered by the company's impressive track record of maintaining dividend payments for 15 consecutive years, as highlighted by one of the InvestingPro Tips.
Investors may also find reassurance in Crown Crafts' Price to Earnings (P/E) Ratio, which stands at an attractive 10.13, indicating that the stock could be reasonably valued relative to its earnings. This is in line with the InvestingPro Tip that the stock generally trades with low price volatility, suggesting a potential safe haven for investors in turbulent market conditions.
For those interested in further insights and analysis, there are additional InvestingPro Tips available, which can provide a deeper understanding of Crown Crafts' financial position and market potential. Subscribers can access these valuable tips and metrics to make more informed investment decisions. Remember to use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro, and explore the full range of tips to enhance your investment strategy.
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