Spin Master is laying claim to a bigger share of the preschool toy market, having reached a definitive agreement to acquire Connecticut-based manufacturer Melissa & Doug for US$950 million. 

Melissa & Doug is best known for making wooden toys for one- to eight-year-olds, including role-play sets, puzzles and stacking blocks. These products helped the company generate US$489 million in revenue last year, according to a release. 

In terms of strategic benefits for Spin Master, the acquisition bolsters its toddler and preschool brand portfolio and helps it expand into sustainably made toys. The purchase also strengthens its presence in specialty retail and e-commerce, which are mainstay distribution channels for Melissa & Doug, according to Spin Master’s global president and CEO Max Rangel. 

The purchase involves a mix of cash (US$450 million) and debt financing (US$500 million), and there are additional earnout payments of up to US$150 million planned, contingent on Melissa & Doug reaching its 2024 and 2025 financial targets. 

This is Spin Master’s second acquisition this year. It picked up robot toy brand HEXBUG from Texas-based robotics company Innovation First International for an undisclosed amount in February. And last year, the toyco acquired Canadian puzzle company 4D Brands International in November and family board game manufacturer SolidRoots in August.