VTech will acquire 100 percent of the outstanding common stock of LeapFrog through an all-cash tender offer followed by a second-step merger. In the tender offer, VTech will offer LeapFrog investors $1.00 per share for LeapFrog’s Class A and Class B shares, which represents a 75.4 percent premium over the closing price of LeapFrog’s Class A shares on February 4, 2016. The total purchase consideration amounts to approximately $72 million. VTech will fund the tender offer through internal resources.
The tender offer will commence on or around March 3, 2016, and will be open for a minimum of 20 business days. The closing of the transaction is subject to satisfaction of certain conditions set forth in the merger agreement, which has been unanimously approved by the Boards of Directors of both companies. LeapFrog’s Board has agreed to unanimously recommend to its stockholders that they tender their shares of LeapFrog common stock pursuant to the tender offer.
“We are delighted to have the LeapFrog brand joining VTech, bringing together two of the great names in children’s learning and entertainment,” says Allan Wong, chairman and group CEO of VTech Holdings Ltd., in a press release. “VTech has been a pioneer in the electronic learning toy category for 35 years. The acquisition will allow us to offer the broadest portfolio of products that enhances the education and development of children across the world, while bringing them fun and joy.”
“We believe this is a terrific opportunity for our employees, customers, and shareholders,” says Bill Chiasson, chairman of LeapFrog’s Board of Directors. “The acquisition and future investment by VTech will be instrumental to helping the LeapFrog brand achieve the mission of helping each child achieve their potential. Importantly, too, this transaction also rewards our shareholders with a significant premium from recent trading levels.”
