A link to the press release on the Corgi website is at this link.
LONDON, May 1 (Reuters) - Britain's Hornby Plc (HRN.L: Quote, Profile, Research) agreed to buy model car maker Corgi for 7.5 million pounds ($14.8 million)in cash to add to its eponymous train sets, Scalextric racing cars and Airfix model aeroplanes.
Hornby said on Thursday it was buying Corgi Classics, one of the world's oldest makers of collectible die-cast models of trucks, buses, cars and aeroplanes from U.S.-listed Corgi International Ltd (CRGI.O: Quote, Profile, Research).
"We will focus on product innovation, improving the distribution network and driving sales growth both in the UK and internationally," Hornby Chief Executive Frank Martin said in a statement.
Corgi was established by the Mettoy Company in Northampton in the English midlands and first started to produce pressed metal toys in the 1930s.
The Corgi brand for die-cast models was born in 1956 and at its height was selling millions of toys a year, including models of the Batmobile, the Lotus John Player Special Formula 1 car and James Bond's Aston Martin DB5.
More recently, production was moved to lower-cost plants in Asia.
The deal is the latest attempt by Hornby to breathe new life into a declining brand, after it bought model plane maker Airfix and Humbrol paints in 2006.
Hornby said it expected the deal, which will be funded from existing bank facilities, to be earnings neutral for the current financial year.
BBC:
Hornby plans to build on Corgi's core market of adult male collectors in Britain and attract younger and more international customers.
It plans to do this through licensing deals, in the way it has broadened the appeal of its Hornby trains with Harry Potter and Thomas the Tank Engine licensing deals.
Its Scalextric racing cars have got a boost from a range based on the McLaren Formula 1 team and star driver Lewis Hamilton.
A forthcoming Scalextric set will be based on the new James Bond movie, Quantum of Solace, that is due out in November.
Last year, Corgi Classics generated sales of £6.5m.
"We believe that the Corgi acquisition is a sensible move at a good price," said Sanjay Vidyarthi, an analyst at Dresdner Bank.
