BabyUniverse Merging with eToys Direct

Apr 01, 2007 9:30 PM  By

BabyUniverse, an online marketer of baby and maternity products, will merge with eToys Direct. The combined company’s brands will include Posh Tots, which sells upscale children’s furnishings, and dolls cataloger My Twinn.

Under the all-stock merger, BabyUniverse shareholders will own approximately one third of the shares outstanding of the combined company, and eToys shareholders will own about two thirds. The deal is expected to close later this year.

John Textor, chairman/CEO of BabyUniverse, will become chairman of the board of the combined company; eToys CEO Michael Wagner will serve as CEO. The combined company is expected to have annual sales of $160 million.

Denver-based eToys was founded in 2004 when a management buyout led by Wagner and affiliates of private equity firm D.E. Shaw Group paid $7.4 million in cash plus royalties for three years for the assets of KB Toys. For the fiscal year ended Feb. 3, eToys had unaudited net sales of about $117 million. Last year it mailed 15 million catalogs.

Jupiter, FL-based BabyUniverse had net sales of $23.7 million for fiscal 2005.