Mattel toys with sale to private equity
- Dan Primack, author of Axios Pro Rata
Photo illustration: Sarah Grillo/Axios. Photo: Christoph Schmidt/picture alliance via Getty Images
Mattel, the toymaker behind Barbie and Hot Wheels, has spoken with private equity firms L Catterton and Apollo Global Management about a possible sale, per the Wall Street Journal.
Why it matters: This could be part of a major reshuffling of the U.S. toy market, with rival Hasbro battling activist investor Alta Fox over its own future.
By the numbers: Mattel shares spiked more than 11% in early trading today, giving it a market cap north of $8.5 billion.
The bottom line: What's still unclear is how private equity would extract value from a company that's already instituted such deep cuts, including factory closures and layoffs of around one-third of its workforce. One possibility could be spinning off its American Girl unit, as its retail piece is a bit of an odd fit with the rest of Mattel, or just banking on big revenue from film projects tied to existing IP.