Toronto’s Spin Master has completed its US$950-million acquisition of Melissa & Doug, a market-leading manufacturer of wooden preschool toys.

Spin Master announced plans to buy the Connecticut-based company in October 2023,  characterizing the acquisition as its largest such deal to date. Melissa & Doug earned US$489 million in 2022 revenue, but Spin Master noted in October that business synergies could generate an additional US$25 million to US$30 million by 2026. 

In the ensuing months, the companies scrapped a proposed earn-out deal that would have seen Spin Master pay up to an additional US$150 million if Melissa & Doug hit certain financial goals in 2024 and 2025. In the end, the transaction involved a US$450-million cash payment and US$500 million in debt financing. 

In 2022, Melissa & Doug was the 10th bestselling toy brand in the US, according to Circana (formerly NPD Group). And this deal brings Spin Master into the wooden toy market, which is proving to be a hot commodity at retail. 

The Canadian toyco has expanded its business through several other strategic acquisitions in recent years, including Rubik’s Cube, robot toy brand HEXBUG, board game manufacturer SolidRoots, Canadian puzzlemaker 4D Brands International and Swedish game developer Nørdlight.  

Photo courtesy of Melissa & Doug