MMAC Acquires Trudy Corp.

Children’s book and audio book publisher Trudy Corp. has entered into an asset purchase agreement in which the company will sell its assets to a company called MMAC.

Trudy Corp. is a publisher of children’s educational story and novelty books, audio books and plush toys, doing business as Soundprints, Studio Mouse and Music for Little The Norwalk, CT-based company was nearly acquired by PCS Edventures, a supplier of hands-on K-12 curricula specializing in learning labs, this past February, but the two parties called off the deal in June.

According to the agreement, MMAC will assume substantially all of the secured and unsecured liabilities of Trudy, with the exception of $2.7 million of personal debt owed to William W. Burnham, the principal shareholder and chairman of Trudy. At closing, Trudy will receive a note from MMAC to Trudy in the principal amount of $225,000 and an equity interest in MMAC, not to exceed 33%, determined in accordance with the net asset value of Trudy.

What’s more, loans from an affiliate of MMAC to Trudy, estimated to be $600,000, will be assumed by MMAC at closing. Holders of Trudy’s common stock will not receive any payment or distribution with respect to their shares pursuant to the sale of substantially all the assets to MMAC.

Ashley Andersen Zantop, president/CEO of Trudy; Fell Herdeg, chief financial officer; and Burnham, director of corporate development, will be retained as employees by MMAC. Burnham and Andersen Zantop will join the board of directors of MMAC. Trudy’s senior management intends to recommend to its board of directors that, after closing, Trudy dissolve or enter into a transaction whereby the Trudy corporate shell may be sold.

“Trudy has been losing money consistently for the past several years,” says Stuart Rose, managing director with investment bank Tully & Holland. “This gets Burnham some stake from his previous loans to the company. The other shareholders of Trudy essentially get nothing, but then again, the company was not worth anything.”

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