High borrowing costs have led RC2 Corp. to close the book on its $163-million deal to buy a privately held publisher.
The Oak Brook, Ill.-based company, which makes Thomas & Friends and Bob the Builder products, announced its decision today. RC2 had said that it was in agreement to acquire the Children’s Publishing Division of Publications International Ltd. in an all-cash transaction.
The deal originally was expected to close in July. Without being specific, however, RC2 said that “adverse capital markets” had stifled the deal.
“Recent shifts in the capital markets have impacted the availability of capital and increased the cost of financing,” said RC2 CEO Curt Stoelting. “High financing costs coupled with other restrictive terms and conditions precluded us from structuring a transaction with the proper levels of operating and financial flexibility.”
Stoelting added that the acquisition could once again get on track, if financial markets improve. RC2 had expected that adding the publisher to its product line would have helped expand Learning Curve brand for infant, toddler, and preschool products.