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Non-Tech : Racing Champions (RACN) -- Ignore unavailable to you. Want to Upgrade?

To: James R.Gross who wrote (30)	3/21/1999 5:05:00 AM
From: Todd D. Wiener	Read Replies (1) \| Respond to of 100

"One of the oldest and most respected names in collectibles, Ertl was founded in 1945 by Fred Ertl, Sr. Today, Ertl is the market leader in both agricultural and custom imprint die cast collectibles. In addition, Ertl's hobby model kit brand, AMT, is a market leader. Revenues for the fiscal year ended September 30, 1998 totaled approximately $175 million. Bob Dods, Chairman & Chief Executive Officer, said, "We are delighted to have the opportunity to pursue what we believe will be a very synergistic acquisition for Racing Champions. Ertl has built a well-respected brand equity in die-cast collectibles, and consummating this transaction would substantially broaden Racing Champions collectibles business. In addition, we believe there would be significant opportunities to expand the combined companies strong presence in all categories of die cast collectibles including NASCAR, custom and classic and agricultural." Because Ertl was part of US Industries, it may not have been given the proper attention that it needs to blossom as a toy company. Ertl has had a history of being acquired by various companies which are then acquired by other firms. Then, it has been sold off. This is happening again. But none of the previous parent companies have had a focus as similar as RACN and Ertl's. Ertl may not have been very profitable, and that may be why RACN got a good deal (presumably). Looking out a year or two, I think this acquisition will have been an excellent move for RACN. I also think it's smart to diversify away from NASCAR. I like the idea of offering exclusive product lines on the website. But I don't think e-commerce has developed to the point where RACN would benefit from a lesser relationship with retailers. From what I hear, RACN has great retail relationships. The special product lines (for the website) would be good because they don't compete with retailers. JAKK is planning to do this later this year. Todd