Tech 4 Kids and The Bridge Merge

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Strategic Partnership Aims to Yield Growth and New Opportunities

The toy industry is known for its mergers and acquisitions. They say no one leaves the toy industry—they just move around. One of the main reasons for this is the opportunity for growth. While some companies grow slowly but steadily with a hit here and a hit there, some of the most successful companies in this industry got to where they are via strategic acquisitions or mergers. Toy industry giants such as Mattel, Hasbro, Spin Master, and Jakks Pacific show how vital these moves are to taking a company to the next level.

The first, critical step is finding a complementary, like-minded company with which to merge. Brad Pedersen, president and CEO of Tech 4 Kids, and Jay Foreman, president and CEO of The Bridge Direct, met at toy industry event PlayCon several years ago, where they were introduced by a mutual colleague.

“This is a very social business, and while we all compete in some way, there are always opportunities and synergies that like-minded people can find to make their businesses stronger,” says Pedersen.

This year, Pedersen and Foreman will merge The Bridge Direct and Tech 4 Kids into a new company focused on classic play. The new company will have an entirely new name (yet to be determined), and will be managed in North America and Hong Kong by an experienced team made up of executives from both companies. Foreman will be CEO, and Pedersen will serve as the president of the new company. The head office will be in Boca Raton, Fla., “which has become a micro-hub of the toy industry,” according to Foreman. The company will also continue to operate Tech 4 Kids’ Canadian office, and will consolidate the Hong Kong offices into one operation to maintain and grow that space.

Pedersen says that the companies have already started to integrate the operational side of the businesses, and, over the next 100 to 200 days, plan to merge more functions together to begin to operate as one. While each company will operate out of its respective gallery at the North American International Toy Fair, the companies will come together under one roof at Fall Toy Preview in Dallas this October.

The Bridge Direct and Tech 4 Kids are both traditional toy companies, and the merged company will remain a multi-line traditional toy business, “playing in a variety of product categories both large and small, taking senior as well as ancillary support positions in categories,” says Foreman. “We will look to consolidate product lines where it makes sense, but expect that the combined portfolio will create a much more robust offering for the market. The plan is to merge operational efficiencies but look to continue to grow our existing product lines and expand our portfolio into other high-volume categories. The key will be to offer the trade highly desirable product at great margins and superior value to the consumer.”

The company will continue to offer toys in the impulse collectibles, retro, construction, and activity toy categories, according to Pedersen. “We want to continue to develop and innovate new product concepts to drive organic growth, while at the same time pursue an aggressive acquisition strategy,” he says. “Our strategy is to more fully leverage the complementary distribution channels, develop accretive, parallel channels, and drive acquisitions,” he explains.

So, why now? “This industry continues to change at a rapid pace,” says Foreman. “It’s come to a point where many of the key stakeholders, including retailers, licensors, and vendors are looking to do more business with fewer partners. The overall key motivation for this opportunity is how hard it is to compete in today’s increasingly competitive retail landscape as a sub $50 million company. You simply don’t have the critical mass to compete on a large enough scale and be the best you can be to customers and partners. By scaling up, this opportunity will let us do just that—our weakness becomes our strength.”

“With added scale, we believe we will accelerate the growth of our value proposition for retailers,” adds Pedersen. “Both companies enjoy a good reputation for providing innovative products, driving sales with effective marketing, shipping on time, and delivering good margins. We will deliver on a more meaningful basis all the things our customers are looking for in a partner.”

While the new company has no plans for an IPO in the near future, there will be an opportunity for private equity firms. “We will become a new strategic player in the business for financial firms that have invested in small to mid-size toy companies,” says Pedersen.

In the near-term, Foreman says the main focus is on a smooth integration and seamless transition for the companies’ partners. Once the company is on solid footing, the door will be open for acquisitions of smaller cap toy companies, with the goal of merging with or acquiring a new company every six to 18 months.

For Pedersen and Foreman, this is the first step toward an even bigger future. “The new combined company will put us in the top 30 toy manufacturers, globally,” says Pedersen. “In less than three years we expect to be in the top 15, and in five years, we will be in the top 10!”

Statement from Tech 4 Kids on Passing of Elise Lachowyn

Tech 4 Kids announced the sudden passing of Elise Lachowyn on Friday, February 12. Elise was involved in a tragic accident in New York City on her way to North American International Toy Fair.

Lachowyn leaves behind her husband Drew and 6-year-old daughter, Skyler. Lachowyn was a veteran of the toy industry and a friend and colleague to many.  As a member of the senior leadership team of Tech 4 Kids, Elise was a highly respected, admired, and accomplished individual who will be greatly missed by all.

In loving memory of Elise Lachowyn, Tech 4 Kids has set up a trust fund for Skyler and will be matching all donations.

 

COMMENTARY: Smart Technology Spans New Categories

by Reyne Rice, trend hunter, toy trend expert, industry analyst, and consultant

Resized,Reyne_RiceSmart tech for kids is no longer buzzword lingo. It has become a reality and has grown to encompass so much more than just technology added to toys to make them interesting or “tech-y.” Today, kids’ technology-enhanced products offer engaging and explorative play patterns that span a wide spectrum of categories. And while there are new technologies being used in these toys, the thrill is in the play experience, not in the technology itself. New technology enhances and extends play patterns way beyond how kids were playing in past decades. Plus, parents, older siblings, caregivers, and educators are all using new technology that companies are translating into toys and tech products for kids’ worldwide.

[Read more...]

COMMENTARY: Toy Fair 2015 Shows Off Toymakers’ Tech-Savvy Side

The Meccanoid G15 KS, from Spin Master

We all know that kids are more tech-savvy at the age of 2 than most of us will ever be. Living in the digital age comes instinctively for kids, and the fact that they have the ability to understand and use technology so early on lets toy manufacturers create some really, really cool tech toys for kids of all ages. Below is a roundup of favorite tech-y playthings from North American International Toy Fair, in no particular order:
[Read more...]

Tech 4 Kids and Irwin Toy Brings the 3D Creation Maker to Toy Fair

3DMakerTech 4 Kids has partnered with Irwin Toy on the first kid-friendly 3D Creation Maker, which will appear in prototype form at North American International Toy Fair. Using an applicator with a unique gel, children trace a design onto a template that is inserted into the 3D Creation Maker. After 10 seconds, the gel turns into a solid, allowing kids to build multi-dimensional structures. Unlike other 3-D design systems, the patent pending process is done safely with light and not heat. The gel is available in multiple colors, including a special glow-in-the-dark formula, and the 3D Creation Maker comes with a variety of pre-designed templates.

The free downloadable 3D Magic App, available for both Android and iOS devices, lets kids create whatever structures they dream up, turning them into templates for use with the 3D Creation Maker.

Nitro Grinders Exclusive at Toys “R” Us, Canada Through September

Microsoft Word - Tech4Kids - Nitro Grinders Final.docxThis summer, Tech 4 Kids launched Nitro Grinders exclusively in Canada, and through September 25, the new toy line will be available only at Toys “R” Us, Canada.

Nitro Grinders Series 1 launched with 56 characters that can ride and glide over obstacles without falling over. Customizable wheels and ramps are also available for extended play. Each highly detailed character belongs to one of five themes: Mechanimals, Wasteland, Elementals, Space Frontier, and Metropolis. The Metropolis collection will be an ongoing Toys “R” Us exclusive.

“The collectible market has been waiting for something new, unique and exciting,” says Brad Pedersen, president, Tech 4 Kids, “Nitro Grinders combines all the qualities kids look for when picking favorites: customization, creativity, and collectability.”

Nitro Grinders retail exclusively at Toys “R” Us, Canada, and will roll out nationwide beginning in mid-October.

Tech 4 Kids Launches Nitro Grinders

Tech4KidsThe newest collectible from Tech 4 Kids, Nitro Grinders, has made its global debut in Canada, where it will be sold exclusively this summer. Kids use their fingers to make Nitro Grinders jump, spin, and grind over obstacles without falling over. Series 1 has 56 characters to collect, including special sets with customizable wheels and ramps. Nitro Grinders will be available in the U.S. this December.

Tech 4 Kids Partners with Flappy Bird to Launch Licensed Toys

Tech4KidslogoTech 4 Kids is partnering with the most downloaded game of 2014, Flappy Bird, for new toy and lifestyle products in time for the game’s re-launch.

First to enter the market this October is Flappy Bird Mash’Ems, available in six different Flappy Bird characters. These will follow the popular Mash’Ems trend that continues to grow with kids of all ages.

Tech 4 Kids will announce further branded items through the end of the year.

COMMENTARY: Easter Is the Other Big Holiday

I don’t know about you, but in my family, Easter is the “other” big holiday. It gets as much attention as Christmas and Thanksgiving, complete with family from near and far, a feast, candy, and, of course, Easter baskets. My sister and I are both in our 20s, but who says grown-ups can’t still get excited to open their Easter baskets and see what goodies await? While Easter isn’t the time for lots of presents, our baskets usually contain some candy, a few small trinkets, and one bigger gift. This Sunday, when kids across the country open their Easter baskets, some may be lucky enough to receive any of the following fun spring toys.

airhogsskywinder

Spin Master Air Hogs Skywinder is an awesome choice for a kid’s “big” basket gift. Kids toss the R/C stunt rocket into the air and squeeze the trigger on the remote. The rocket flies, dives, hovers, and loops, and is lightweight enough that it can be used indoors. It flies high, though, so kids will enjoy it most outside—a perfect reason to go outdoors and celebrate spring! [Read more...]

COMMENTARY: Easing Kids’ Nighttime Fears One Toy at a Time

It’s 9 p.m.—already well past bedtime—and your little one is still buzzing about the house in his or her favorite footie pajamas begging to play with just one more toy for just five more minutes. Whether it’s because they are restless or afraid of the dark, looming shadows in their room, getting kids down at the end of a long day can be a challenge. While you’d probably like the toy box to stay shut so you can get them off to bed, there are actually some great toys on the market that can assist you in this (often) headache-inducing process.

DinoRoar.Baby'sFirst.GoldbergerPart of the Baby’s First line, from Goldberger Toys, Dino Roar is great for kids who get scared when bedtime rolls around. The adorable baby doll is dressed in a pink or blue dinosaur costume, so both boys and girls can enjoy the security Dino provides. Little ones can press Dino’s belly for a “roar” sound that’s sure to intimidate any scary monsters lingering in the closet or under the bed. Dino’s glowing face and soft feel give kids ages 18 months and up security while falling asleep.

StarShineWatchdogs.KellytoyFor kids a bit older, Starshine Watchdogs, from Kellytoy USA, are ready to protect and serve at bedtime. Orion (blue) and Skye (pink) are cuddly plush puppies. They each say reassuring phrases, such as “don’t worry, I’m here,” and “all secure, sleep tight.” By pressing Orion or Skye’s right paw, the included Star Light nightlight illuminates the room, but automatically shuts off after a few minutes. Parents can even purchase additional Star Lights for other areas of the house, in case kids need to get up in the middle of the night to use the bathroom or get a glass of water. The bright star on the puppies’ chest also glows when kids press their left paw. These pups are great for travel.

Hello Kitty Lullalight, from Tech 4 Kids

Hello Kitty Lullalight, from Tech 4 Kids

Night lights are great for kids who have trouble with the dark, but throwing their favorite characters into the mix can make them feel even more secure at night. Spot Lite is a line of light-up character-based products from Tech 4 Kids. Including in the line are Lullalights, which are dome-shaped nightlights that glow and play lullabies. Featuring characters including the Smurfs, Hello Kitty, and Moshi Monsters, Lullalights project a colorful character image on the bedroom ceiling. Nite Friends are shaped nightlights also featuring kids’ favorite characters. They have an auto shut-off and are wireless, making them great for travel.

Jake.WallFriends.UncleMilton

Wall Friends, from Uncle Milton, not only serve as a nightlight, but as a piece of room décor. Available in multiple popular characters including Doc McStuffins, Cinderella, Jake the Pirate, Lightning McQueen, Minnie, and Mickey, Wall Friends easily adhere to bedroom walls. Each Wall Friends includes a remote, so kids can interact with them and hear their favorite characters say familiar phrases without getting out of bed. Wall Friends even feature two brightness settings and an auto shut-off.

All of these innovative products provide parents with an easy way to get their kids safely settled into bed at night. Easing their fears in a fun way with plush, dolls, or their favorite characters will make them stop begging to sleep in mom and dad’s room, and keep them better rested for the busy day on the horizon.

For more commentary from Marissa, check back often. Views expressed in this column are solely those of the author and do not necessarily reflect the views of The Toy Book as a whole. We hope that you will share your comments and feedback below. Until next time!