14 LEXPERT MAGAZINE
|
JULY/AUGUST 2016
LEXPERT: With this deal, Spin Master will
be able to develop Toca Boca's new TV di-
vision and create a whole franchise around
their hugely popular apps for children. Is
that the objective?
Chris Harrs (Executive VP and GC, Spin Mas-
ter): Our intention is to leave them alone.
ey have already embarked upon a full
360 approach to their brand by launching
Toca TV and initiating a merchandising
program that will launch next spring in
North America. Wherever Spin Master
can lend a helping hand with its retail ex-
pertise, it will.
LEXPERT: I would have expected you to le-
verage your experience with hit kids' shows,
like Paw Patrol and Bakugan.
Harrs: Spin Master's experience in the ani-
mation space is quite unrelated and likely
will not be tied to Toca TV. Toca TV is re-
ally about aggregating original and curated
animated and live content from the inter-
net into a safe environment that appeals to
kids from ages three to nine.
LEXPERT: Toca Boca is a Swedish outfit,
but it actually first set up shop in Canada in
2013 with its acquisition of Toronto-based
Sago Mini. Is that the transaction that first
caught Spin Master's eye?
Harrs: Spin Master has admired Toca Boca
for some time. ... Most of the highest-gross-
ing kids' apps relate to licensed content, so
apps based on
TV shows or movies gener-
ally attract the most users. For Toca Boca
to build so many successful apps without
the association of an entertainment prop-
erty or advertising is truly impressive.
LEXPERT: So how did the deal start?
Harrs: Toca Boca was owned by the Swed-
ish publishing giant, Bonnier Group. Toca
Boca happened quite accidentally for them
and grew out of their R&D department. It
was really outside Bonnier's core business.
Mathias Berggren, DLA Piper Sweden KB
(for Bonnier Group): Bonnier was, of course,
very proud of the development and growth
of Toca Boca, and much of its success was
directly attributable to its employees.
LEXPERT: ose employees seem to have
been guided by a principled approach to
app development — no in-app purchases,
for example, and gender-neutrality. Were
there many meetings to ensure that the
company cultures would mesh?
Berggren: e corporate culture of the ac-
quirer was very important for Bonnier.
Harrs: We wanted to make sure that these
people were committed to staying post-
Charm Offensive
closing and understood clearly that Spin
Master believed in the Toca vision and
would be supportive.
Berggren: ere were many meetings be-
tween the executive teams of Bonnier Me-
dia and Spin Master, as well as Toca Boca,
to get comfortable that the fit was there
and that this acquisition would work well
for Toca Boca's executives and employees.
LEXPERT: At what point were you satisfied
that formal discussions could begin?
Harrs: ere were extensive discussions
early on, but other entities were interested
in acquiring Toca Boca. It was somewhat
of a competitive situation and at one point
in the process we ended up being dropped.
However, our senior executives were very
keen on this deal and flew to both Sweden
and San Francisco on multiple occasions to
convince the owners and the Toca Boca se-
nior executive that Spin Master was serious
and that we would be the ideal new owner.
LEXPERT: So you found yourself in the
middle of a bidding war?
Harrs: e Bonnier Group was courting
other bidders and from the time Spin Mas-
ter was let back into the process, it was six
weeks until close. e driving force behind
wanting to get the deal done was one of
Spin Master's founders and Co-CEO Ron-
nen Harary, and he drove a relentless pace
requiring update meetings every day and
towards the end, getting all sides together
to hash out final points.
Before Spin Master could buy Toca Boca, it needed the blessing of its creative talent
INTERVIEW BY DAVID DIAS
Chris
Harrs
EVP,
GC, Spin
Master
Corp.
Mathias
Berggren
DLA Piper
Sweden KB
(for Bonnier
Group)
Vaughn
MacLel-
lan
DLA Piper
(Canada)
LLP (for
Bonnier
Group)
Glen
Eddie
Torkin
Manes LLP
(for Spin
Master)
Toca Boca, a Swedish developer of children's apps, had TV ambitions. So who better
to buy the company out than the team at Spin Master, responsible for such hits as Paw
Patrol? (Ask your kids.) One wrinkle, though. While the creative masters behind Toca
were looking for a backer, it had to be one that shared their ethics — and, with a bid-
ding war underway, they had options. Spin Master, however, was very convincing.
Jeffrey
Cohen
Torkin
Manes LLP
(for Spin
Master)
ON THE DEAL
