LeapFrog Enterprises, a well-known toy manufacturer that makes electronic and educational toys, has announced that it has been acquired by VTech, a Hong Kong-based company, for a hefty $72 million.
The deal unites two of the largest makers of educational tablets and toys, most of which are designed for preschoolers and early elementary children. LeapFrog is best known for its LeapPad lineup of devices, which allows users to plug in cartridges to play games and perform other activities.
The deal, according to LeapFrog chairman Bill Chiasson, "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 per share, which is quite a bit more than the 57 cents at which it closed on Thursday's trading, despite not even being close to the $8 at which it traded a few years ago.
LeapFrog has reportedly been investing as much as $30 million per year into developing new hardware in the form of tablets. Despite this, the price of adult-targeted tablets has come down, and adults are starting to buy new ones, passing on their older tablets to their children. This is one of the major reasons that LeapFrog's shares have been on the decline.
Of course, VTech too has taken a few hits of its own of late. Recently, the company went through a massive data breach, in which over six million children's toys were hacked, and personal information stolen.
