VTech LeapFrog $72 Million

Published: February 7, 2016

VTech LeapFrog $72 Million, LeapFrog Enterprises, the maker of well-known electronic educational toys for children, said Friday it has agreed to be acquired by rival VTech Holdings of Hong Kong for $72 million.

The deal brings together two of the biggest names in the market for tablets and other electronic toys designed primarily for preschool and early elementary school-age children. LeapFrog is probably best known for its LeapPad line of handheld educational devices, which take cartridges that let children play games and activities.

Requests to LeapFrog for comment were not immediately returned. In a statement announcing the acquisition, LeapFrog Chairman Bill Chiasson said the deal “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.”

The deal values LeapFrog at $1 a share, or a 75 percent premium over the 57 cents at which the stock closed Thursday, yet still a far cry from the $8 at which LeapFrog traded two years ago.

“This deal comes down to a question of capital structure,” said Stephnie Wissink of Piper Jaffray. “Both companies are having to make a strategic decision about whether they can compete in today’s marketplace.”


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