HgCapital to divest Smurf maker Schleich: sources

FRANKFURT Fri Oct 5, 2012 9:56am EDT

A boy is playing with a new fantasy toy figure by Schleich during the press preview of the 62th International Toy Fair in Nuremberg February 2, 2011. REUTERS/Michaela Rehle

A boy is playing with a new fantasy toy figure by Schleich during the press preview of the 62th International Toy Fair in Nuremberg February 2, 2011.

Credit: Reuters/Michaela Rehle

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FRANKFURT (Reuters) - Private equity group HgCapital (HGT.L) has mandated Goldman Sachs (GS.N) to look for a buyer for Schleich, the maker of Smurfs toys and other plastic figurines, two sources familiar with the plans said on Friday.

The auction will start at the beginning of next year, one of the sources said.

On its Internet page, HgCapital signaled that Schleich would eventually be put on the block .

"Several multi-national toy makers represent natural trade buyers," it said, adding that a sale to a rival buyout firm was also possible.

The sale is another example of private equity groups moving to sell some of their most mature companies after a slow year for deals in 2012.

In 2006, HgCapital bought Schleich, saying in its annual report at the time that the subsidiary had an enterprise value of 165 million euros ($215 million).

Peers like Hasbro (HAS.O) and Mattel (MAT.O) trade at 7-9 times earnings before interest, taxes, depreciation and amortization, a level that HgCapital is hoping to cash in as well, the sources said.

Schleich, which employs 3500 staff, in 2011 posted sales of roughly 100 million euros and earnings before tax of about 23 million euros,

"Compared to peers we are very profitable," managing director Erich Schefold told Reuters, adding that the company managed to keep up its profitability in 2011. He declined to comment on any sale.

The Schwaebisch-Gmuend-based company was founded in 1935 by Friedrich Schleich, starting as a maker of plastic components, and in the 1950's introduced its range of Schleich figurines, now including Smurfs, Snoopy, The Muppet Show characters as well as dinosaurs, domestic and wild animals.

HgCapital and Goldman Sachs declined to comment.

(Reporting by Arno Schuetze, Alexander Hübner; additional reporting by Simon Meads)

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