Newell Rubbermaid Inc. has sold Little Tikes Commercial Play Systems in Farmington, Mo., to PlayPower Inc., which owns a competing playground equipment maker, Miracle Recreation Equipment Co.
Little Tikes Commercial Play Systems and Miracle Recreation both make equipment found on playgrounds, schools and parks across the country. The companies use rotational molded parts such as sliding boards, combined with metal and wood components to create the finished playground setups.
Terms of the deal were not disclosed. Newell Rubbermaid announced the sale July 1. Officials at PlayPower did not return telephone calls.
Newell Rubbermaid said the Commercial Play Systems sell-off does not affect Hudson, Ohio-based Little Tikes Co., which rotomolds consumer toys. The company said it has retained that toy business, which according to Plastics News and industry estimates is by far the largest rotomolder in North America, with rotomolding-related sales of more than $200 million.
The deal makes St. Louis-based PlayPower a much-larger player in playground equipment, since Newell Rubbermaid said Little Tikes Commercial Play Systems generated about $60 million in 2003 sales.
Miracle Recreation also will move up the rotomolding ranks. Plastics News' rotomolders ranking estimates that Miracle Recreation now generates $10 million in rotomolding-related sales.
Plastics News has not ranked Little Tikes Commercial Play Systems separately, but industry sources estimate that about $15 million of its total sales come from rotomolded content. That means that the combined companies will stand among the 20 largest rotomolders in North America.
Miracle Recreation already runs two plants in Missouri, at its headquarters in Monett and in Advance, in addition to several other factories. The company also rotomolds a floating boat dock called the EZ Dock.
According to the Miracle Recreation Web site, the company runs four rotomolding machines.
Little Tikes Commercial Play Systems' plant was damaged by a fire in 1998, but remained open and was renovated with new rotomolding equipment, according to an industry source. That Farmington plant has five rotomolding machines, the source said.
The Farmington factory employs 325 people, said a Newell Rubbermaid spokeswoman.
PowerPlay owns several other companies, including Soft Play LLC, which makes indoor play equipment for malls, restaurants, amusement parks and other customers; and Hags Play AB, a Swedish maker of wood and metal playground equipment.
For Sandy Springs, Ga.-based Newell Rubbermaid, selling Commercial Play Systems ``marks the close of our previously announced divestiture plan for 2004,'' according to Joseph Galli, chief executive officer. That plan included selling off nonstrategic businesses and exiting low-margin areas.
Jesse Herron, Newell Rubbermaid's vice president of investor relations, said Commercial Play Systems ``is a great business [but] it's not a strategic fit with our portfolio.''
What is the future role for Little Tikes in Newell Rubbermaid? Herron repeated Galli's statements that the divestiture program now is over. ``It allows us to spend our time focusing on running our businesses and delivering results,'' he said.
Herron said Newell Rubbermaid likes businesses with strong brand names and innovative products.