Catalog Veteran Buys “Significant Position” in MindWare

Catalog veteran Martin Smith has purchased a “significant position” in MindWare, a New Brighton, MN-based cataloger of educational toys. New York-based investment bank West Cos. advised both parties in the deal.

Smith, a former vice president of marketing for Newport News, will assume the role of CEO. MindWare founder Jeanne M. Voigt will remain president.

Smith intends to double the size of the $15 million-$20 million cataloger within the next five years. “What appealed to me was that the catalog had a track record of several years of strong growth in the top line and good profitability in the bottom line,” Smith says. “The customer file is growing quite strongly because the company has prospected quite aggressively.” MindWare has approximately 150,000 12-month buyers.

Voigt says of her yearlong search for outside investment, “It’s like getting married. We talked to a variety of people, and I had some personal criteria that wasn’t just simply financial. We needed to be a good fit, and we wanted to find a real partner.”

Larry West, principal of West Cos., says the MindWare transaction is emblematic of what’s transpiring with catalog industry mergers and acquisitions: Individual investors, such as Smith, as well as private equity shops are inquiring about catalogers with revenue comparable to MindWare’s. “It’s not only the bigger companies that can get investment,” West says. “We are starting to see much smaller catalogers getting investment. There are investors out there, decent-size equity shops that are willing to do minority and majority investments.”

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