Trudy Corp., whose primary subsidiary, Soundprints, publishes children's books plus packages, has signed a letter of intent to be acquired by Futech Interactive Products. Based in Ph nix, Ariz., Futech is a privately held children's products manufacturer and distributor.
Under terms of the agreement, Futech will acquire Trudy for a total of $3.5 million divided between $3 million in stock and $500,000 in cash. In addition, Futech will guarantee the repayment of approximately $800,000 in loans made to Trudy by company officers. The deal is expected to close before the end of February.
William Burnham, Trudy chairman, said the need for fresh capital to expand the company was the main reason behind the sale. "Soundprints has been actively seeking a partner to take the company from a small niche press to a mainstream book publisher," Burnham said.
For the fiscal year ended March 31, 1998, Trudy had income from continuing operations of $78,876 on sales of $5 million. For the six-month period ended September 30, Trudy reported a 22% decline in sales to $1.7 million and a net loss of $111,457, compared to net income of $153,357 in the first half of fiscal 1998. Trudy attributed the drop in results primarily to a decline in sales to warehouse clubs, as well as lower sales to bookstores and specialty outlets.
Trudy, which has approximately 20 employees, publishes about 10 new titles annually and has a backlist of approximately 70. Futech intends to keep Trudy's Norwalk, Conn.-based facility open to serve as its East Coast distribution site.
Trudy was the seventh acquisition or joint venture made by Futech in 1998. Among its other deals was the acquisition of Little Tiger Press and a joint venture with Joy Berry, the children's book author, to develop educational products for children under the Gold Star Publishing imprint. According to Futech chairman Vincent G tt, the firm's goal is to "become a major children's product company."