Vertex Capital Buys Small World Toys

Vertex Capital has acquired Small World Toys, a Carson, Calif,-based specialty toy maker. No financial terms were disclosed for the deal, which was done in partnership with company management.

PRESS RELEASE

Small World Toys, a specialty toy company with cutting edge brands, today announced new ownership, management and an infusion of capital under NYC based Vertex Capital.

Small World Toys has offered patented, well known brands including Ryan’s Room, Gertie Balls, Neurosmith and All About Baby for over 40 years. The buyout, led by Vertex’s Managing Director and Small World’s interim President Larry Nusbaum, an industry expert in consumer products, will improve gross margins by sourcing more competitively in China while maintaining quality the brand is known for, rationalizing the overhead, creating impulse product lines with media support, and targeting the mass and discount channels for brand extensions to increase the revenue base.

Although Small World Toys experienced meteoric success in the 90’s, with revenues in excess of $50 million annually, in 2008 consumer spending decreased with a shrinking customer base in their niche specialty toy and gift sector, the company experienced large losses.

“Small World Toys went through a tough transition and an ill advised merger over the past couple years which made for turbulent times,” said Larry Nusbaum, Chairman, Vertex Capital and Interim President, Small World Toys. “Our expectation is that the company will be profitable out of the gate, and we see bright prospects for expansion in 2010. Our experienced and dedicated staff on site increases the probability of success, and was worth Vertex Capital making the bet.”

Small World Toys joins the family of other companies to benefit from Vertex Capital’s turnaround and growth strategies, including iconic consumer company Ronco and tabletop brand Fitz & Floyd. The approach focuses on paring down to the primary lines, promoting key impulse products with TV, print and point-of-purchase materials, driving customer awareness, and selling through at retail.

The terms of the deal were not disclosed at the time of this release.

About Vertex Capital:

Founded in 2008, Vertex Capital Management LLC (“Vertex”) is a NYC based private equity group. A premier equity investment group focused on making control investments in distressed private companies, Vertex partners with existing owners or industry experienced operators to preserve jobs rather than eliminate them. Companies currently owned by Vertex include Ronco Acquisition Group and Fitz & Floyd.