Monarch Avalon to sell game unit to Hasbro In wake of loss, local company to get $6 million in cash

Acquisitions

August 05, 1998|By J. Leffall | J. Leffall,SUN STAFF

Monarch Avalon Inc., a Baltimore printing, game-making and publishing company, said yesterday that it has agreed to sell its Avalon Hill Game Co. division to Hasbro Inc. for $6 million in cash.

As part of the deal, Monarch Avalon will change its name to Monarch Services Inc.

The move, which is subject to shareholder approval, comes three months after Monarch Avalon reported a $1.73 million loss for its fiscal year that ended in April.

For fiscal 1997, Monarch Avalon reported a profit of $180,000. Sales in 1998 were $8.23 million, up from $7.86 million in 1997.

Monarch Chairman A. Eric Dott declined to discuss why his company's game unit, which is known for electronic, leisure and military-simulation games, is being sold.

Dott said Avalon Hill was on the market in 1995, then was taken off the block for revamping.

"Hasbro wanted to buy it, so we took the offer," he said. "We haven't decided what our next move will be yet, and the deal is not completely finalized."

The Avalon Hill division includes Avalon Hill Software and Victory Games.

The assets being sold include trademarks, copyrights, inventory and tooling.

Waterloo, Afrika Korps and D-Day are some of the more well known games produced by Avalon Hill.

John G. Taylor, an analyst for Arcadia Investment Corp. of Portland, Ore., which specializes in games and toys, said the move is good for Hasbro.

"I suspect Hasbro has pretty big plans for this company," he said. "By taking the established brand-name games of Avalon Hill and integrating them into interactive games for personal computers, Hasbro stands to do well."

Hasbro's subsidiaries include Parker Bros. Inc. and Milton Bradley.

Over the years, Hasbro, a large toy-maker based in Pawtucket, R.I., has been famous for taking established products such as Mr. Potato Head and expanding them into as many categories as possible.

Hasbro owns the rights to some of the most famous board games -- including Monopoly, Candyland and Clue -- and has made computer versions of them.

Taylor said Hasbro, by creating a subsidiary to handle interactive games, is moving into a burgeoning area.

"The interactive-game market, especially on PCs, is growing like a weed," he said. "With Avalon Hill, they are picking up strong brands in the strategy category.

These games are the most popular in the interactive PC category. There's no speed, action or movement; there is just strategy. People who play games on PCs like those type of games."

The Monarch Services printing business, Monarch Envelope and Girls' Life magazine, a joint venture with the Girl Scouts of America, will remain with Monarch Avalon.

Despite the Nasdaq's decline of almost 4 percent yesterday, shares in Monarch Avalon, which hit a 52-week low of $1.50 on July 20, rose 81.25 cents to close at $2.5625.

Pub Date: 8/05/98

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