Gladstone Investment Corporation (Nasdaq: GAIN) has acquired a majority stake in McFarlane Toys, a designer and distributor of licensed collectible action figures and statues, expanding its portfolio of lower middle-market businesses.
Gladstone provided a combination of debt and equity financing to complete the acquisition. Financial terms of the transaction were not disclosed.
McFarlane Toys co-owners Todd McFarlane and Stephan Tetrault will retain meaningful minority ownership stakes and remain actively involved in the company’s strategic direction.
Founded in 1994 by comic book creator Todd McFarlane, the company develops collectible products based on licensed intellectual property spanning entertainment, video games, comics, anime and professional sports.
McFarlane Toys works with entertainment studios, gaming publishers, sports organizations and other intellectual property owners to produce detailed action figures, statues and related collectibles.
Its products are distributed through national retailers, specialty stores, domestic and international distributors, e-commerce platforms and direct-to-consumer channels.
The investment is intended to support McFarlane Toys’ expansion into new collectible categories, development of additional licensing partnerships and growth in domestic and international markets.
“When I started McFarlane Toys, the goal was to give fans and collectors products with a level of detail and creativity that stood apart,” said Todd McFarlane, founder of McFarlane Toys.
“We are excited to partner with Gladstone Investment and the new opportunities this partnership will create, as we continue developing new products, supporting our licensing partners, and delivering the quality and creativity our fans expect.”
Stephan Tetrault, CEO and co-owner of McFarlane Toys, said the partnership will provide additional reortfolio
“Our partnership with Gladstone represents an exciting opportunity to accelerate our growth, expand our global reach, and continue diversifying our product portfolio,” Tetrault said.
For Gladstone, the acquisition represents an investment in an established consumer products company with longstanding licensing relationships, established retail distribution and a dedicated collector customer base.
“McFarlane Toys has established a differentiated collectibles business through its well-recognized brand, distinctive design capabilities and deep relationships with leading licensors and retailers,” said Michael Cueter, managing director at Gladstone Investment.
Cueter said the company’s ability to introduce new licensed properties and collectible formats provides opportunities for continued expansion.
Erika Highland, president of Gladstone Investment, said the transaction aligns with the firm’s strategy of investing in founder- and management-owned lower middle-market businesses.
Gladstone Investment is a publicly traded business development company that makes equity and secured debt investments in connection with acquisitions, changes in control and recapitalizations.
The firm seeks to generate recurring investment income while pursuing longer-term capital appreciation through equity ownership.
Intrepid Investment Bankers LLC served as exclusive financial advisor to McFarlane Toys.
The transaction positions McFarlane Toys to pursue additional licensing opportunities and international expansion while retaining the involvement of its founder and existing leadership team.
