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Zany Brainy will buy Noodle Kidoodle
By Associated Press, 4/25/2000
EW YORK - Zany Brainy Inc. is buying rival toy chain Noodle Kidoodle Inc. in a $35 million deal that will unite the two largest retailers of specialty toys in the United States.
The deal announced yesterday will create a 163-store chain under the Zany Brainy name selling a wide-range of educational toys. Combined sales topped more than $370 million last year.
Analysts called the merger a smart combination that will help strengthen Zany Brainy's position against larger bricks-and-mortar toy stores and those that operate on the Internet.
''This deal makes a lot of sense because these chains have a complementary presence and overlap a lot in what they sell in their stores,'' said Richard Fradin, an analyst at Chicago-based William Blair & Co.
Analysts said the deal will help the chains fend off their new - and fast-growing - competition.
For one, they can cut costs by slashing duplicate personnel, getting better deals on merchandise since they are buying for a larger number of stores and consolidating their online operations.
Under the agreement, 1.233 Zany Brainy shares will be exchanged for each Noodle Kidoodle share. The deal, which still needs shareholder and regulatory approval, is expected to close by the end of the second quarter.
Shares of Zany Brainy fell 50 cents, or nearly 12 percent, to $3.78. Noodle Kidoodle shares rose 25 cents to $4.50.
boston.com
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Actually, the competition between the two was hurting both so this is good news.
Jack |
