Excelligence Sold to Equity Firm

On the heels of a very successful 2005, Excelligence Learning Corp. is being acquired by an affiliate of Thoma Cressey Equity Partners for $125 million. The transaction, which is subject to approval by Monterey, CA-based Excelligence’s stockholders, is expected to close in the fourth quarter of 2006.

A manufacturer/marketer of toys, learning resources, and supplies for schools, day-care centers, and other youth-related facilities, Excelligence grew its revenue nearly 10% last year, hitting a record $132.7 million. Net income soared 180%, to $3.6 million. In addition, the company’s gross profit for the year rose more than 13%, to $46 million, or 34.7% of revenue. Its Early Childhood division includes online toys merchant SmarterKids.com and the Discount School Supply and Early Childhood Manufacturers’ Direct catalogs. Through its Elementary School segment, Excelligence offers fundraising programs for schools.

The company attributes much of its growth during the past year to its BigBook catalog, which it launched last summer. Selling discount school supplies, the BigBook is sent to the company’s best customers 12 times a year. While Excelligence mailed 65,000 BigBook catalogs last year, it plans to mail nearly 500,000 this year.

As part of the acquisition, Excelligence will become a private company. Its management, including CEO Ron Elliott, will continue to operate the business under its current name and operating structure. Under terms of the agreement, Excelligence stockholders will receive $13 in cash for each share of Excelligence common stock that they hold, which represents a 60.5% premium over the $8.10 closing price of the company’s common stock on July 19.

Thoma Cressey Equity Partners, which has offices in Boston, Chicago, and San Francisco, currently manages about $2 billion in a series of private equity funds.

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