Goodbaby International Announces Acquisition of Leading U.S. Juvenile Durable Products Brand Evenflo
Goodbaby International Announces Acquisition of Leading U.S. Juvenile Durable Products Brand Evenflo. Expand Brand and Product Portfolios Facilitate Transition into Leading Global Branded Business.
(6 June 2014, Hong Kong) Goodbaby International Holdings Limited (“Goodbaby International” or the “Company”, SEHK stock code: 1086, together with its subsidiaries, the “Group”), an international durable juvenile products company headquartered in China, is pleased to announce the acquisition of one of the world’s most recognized providers of high quality baby care and juvenile durable products, WP Evenflo Group Holdings, Inc. (“Evenflo”).
On 6 June 2014, the Group entered into an Agreement to purchase the entire issued share capital of Evenflo, which is principally engaged in the design, research and development, manufacturing, marketing, and sale of juvenile durable products under the brands “Evenflo”, “ExerSaucer”, “Snugli”. The consideration for the acquisition is approximately US$143.0 million (equivalent to approximately HK$1,108.6 million).
With a history dating back to 1920, Evenflo is one of the world’s most recognized providers of high quality baby care and juvenile products. Its comprehensive product portfolio includes car seats, travel systems, juvenile gates, high chairs, portable baby suite play yards, activity centers, carriers, and doorway jumpers. Evenflo commands high consumer awareness in the mid-end to value segments and its major products segments occupy top market shares in the United States. Its products are substantially manufactured in Piqua, Ohio, and Tijuana, Mexico, and are sold globally. Evenflo also has an established and efficient marketing and operational platform in North America, which generates sales direct to retailers such as Wal-Mart, Toys ‘R’ Us, Target and Amazon.com. Its 2013 revenues amounted to approximately US$208 million (equivalent to approximately HK$1,612 million), which was primarily attributable to the United States.
The acquisition is aligned with the Group’s strategy of reinforcing its leadership status in the global juvenile products market with its own brands, while expanding its resources to support its growing alliances with other major international brands.
The acquisition allows Goodbaby International to further develop its brand portfolio of safe, innovative, fashionable, and easy-to-use juvenile durable products across all price points. The Group’s gb and CYBEX brands are already well-established in the mid to high price points segments. Evenflo’s positioning as a mid-end to value brand completes the Group’s offerings to service global consumers across all price points. Furthermore, the Group’s established product development and manufacturing capabilities in strollers and car seats are complemented by Evenflo’s mature car seat product portfolio and technical and manufacturing expertise. The acquisition also allows the Group to utilize its research and development capabilities to support the diversity of products under the “Evenflo” brand as well as improve profitability and expand the brand into additional product categories and international markets.
In addition, the acquisition enables Goodbaby International to expand its manufacturing footprint to North America, supporting the Group’s penetration into North America as well as better servicing its customer brands with a view to minimize lead times and exposure to increasing trans-oceanic freight rates. The integration of China and North America supply chain system will provide the Group with a fully vertical capability, the versatility to rapidly and efficiently respond to market requirements and enhance competitive advantage. The Group can further gain access to Evenflo’s strong relationships with distributors and retailers in North America to complement its existing global capabilities.
Furthermore, the combination of the Group and Evenflo creates a truly global player with operational platforms and distribution channels in China, Europe and North America. The acquisition of Evenflo’s operational platforms (and the recent acquisition of Columbus Holdings GmbH which owns CYBEX, a well-known high-end car seats brand in Europe) significantly shortens the Group’s time to market in Europe and North America, allowing the Group to consolidate global resources, to realize selling and administrative savings and achieve infrastructural and logistical efficiencies internationally.
The Group is confident that the acquisition will complement its existing business strategy, including strengthening strategic partnerships with well-known international brands, driving its international growth, increasing market share, and expanding its product portfolio and customer base, thereby increasing profitability for the Group and the overall shareholder value of the Company.
Mr. Song Zhenghuan, Chairman and CEO of the Group, commented, “We are delighted to welcome Evenflo into Goodbaby’s portfolio of brands. Together with CYBEX which we acquired earlier this year, we believe the addition of Evenflo will augment the Group’s product offering, and provide a strong platform for the Group in the overseas markets. The acquisition represents a key step in Goodbaby’s strategy to upgrade its global business model in the international market, with a comprehensive brands and products portfolio, supported by world-class production, branding, marketing and distribution platforms.”