Spin Master Establishes Spin Master Ventures to Accelerate Growth in Key Strategic Areas

Investments will advance the Company’s strategy and assist start-ups and entrepreneurs in the children’s entertainment space

TORONTO, Oct. 19, 2021 /PRNewswire/ — Spin Master Corp. (“Spin Master” or “the Company”) announced today the creation of Spin Master Ventures (“SMV”). SMV’s focus is to accelerate growth in each of the Company’s three creative centres comprising Toys, Entertainment and Digital Games, through strategic minority investments. SMV’s investment mandate will be centred on medium and long-term trends including emerging technologies, pioneering services and other areas where Spin Master’s offering can be strengthened.

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“We’ve always stayed true to our entrepreneurial DNA based on innovation, openness to ideas, partnerships and pushing boundaries,” said Ronnen Harary, Spin Master’s Co-Founder and Board Chair. “The pace of innovation within the toys, entertainment and digital games industries is accelerating rapidly and by investing with a long-term view in leading ventures with promising ideas, we can increase our access to potentially game-changing thinking and concepts. Spin Master Ventures will establish us as the partner of choice for entrepreneurs looking for capital to start and grow a business in the kids’ space and will complement our acquisition strategy as well as bolster our product development pipeline.”

SMV will be led by experienced industry veterans, with a deep focus by creative centre. Spin Master will initially allocate $100 million to SMV, funded from existing internal resources. SMV’s strategy will comprise minority investments and will include both early-stage companies, with investments in new teams and novel ideas, as well as providing growth capital to emerging business that have proven product and market fit. SMV’s geographic focus will be global but will be North American and Europe-centric initially.

To launch the initiative, SMV has made minority investments in two companies aligned with Spin Master’s  growth plans within the Digital Games creative centre. Nørdlight, a mobile game development company based in Stockholm is comprised of a five-person team with over 50 years of experience in the mobile games industry. Nørdlight’s team have delivered some of the largest grossing mobile digital games in history including running the prototype team at King.com and leading the technology and art for digital games titles including Candy Crush Saga. Nørdlight will help accelerate Spin Master’s strategy of monetizing its owned IP in the digital games space.

The second investment is in Hoot Reading, an online tutoring service that provides children with live, 1:1 reading lessons with experienced teachers. The research-based service connects kids with real classroom teachers to advance their reading skills through a video chat platform that allows for real-time on-screen collaboration between the child and teacher. The company is headquartered in Canada and has teachers and students throughout North America. Using personalized and engaging lessons and a carefully curated library of more than 2,000 high-quality levelled texts, Hoot Reading aims to help as many kids as possible to become not only proficient, but excellent readers.

“Establishing Spin Master Ventures enables Spin Master to work with extraordinary companies and teams, providing them with capital and access to our deep knowledge and expertise to drive their ideas and businesses forward,” added Anton Rabie, Spin Master’s Co-Founder and Director. “Spin Master Ventures aims to become the ultimate partnership generator, a tool for widening the Company’s networks, knowledge and relationships. By partnering with these entrepreneurs, we can bolster our leadership position within the children’s entertainment industry.”

About Spin Master

Spin Master Corp. (TSX:TOY) is a leading global children’s entertainment company creating exceptional play experiences through a diverse portfolio of innovative toys, entertainment franchises and digital games. Spin Master is best known for award-winning brands PAW Patrol®, Bakugan®, Kinetic Sand®, Air Hogs®, Hatchimals®, Rubik’s Cube® and GUND®, and is the toy licensee for other popular properties. Spin Master Entertainment creates and produces compelling multiplatform content, stories and endearing characters through its in-house studio and partnerships with outside creators, including the preschool success PAW Patrol and nine other original shows along with multiple short-form series, which are distributed in more than 190 countries. The Company has an established digital games presence anchored by the Toca Boca® and Sago Mini® brands. With close to 2,000 employees in 28 offices globally, Spin Master distributes products in more than 100 countries. For more information visit spinmaster.com or follow on Instagram, Facebook and Twitter @spinmaster.

Forward-Looking Statements

Certain statements, other than statements of historical fact, contained in this press release constitute “forward-looking information” within the meaning of certain securities laws, including the Securities Act (Ontario), and are based on expectations, estimates and projections as of the date on which the statements are made in this press release. The words “plans”, “expects”, “projected”, “estimated”, “forecasts”, “anticipates”, “indicative”, “intend”, “guidance”, “outlook”, “potential”, “prospects”, “seek”, “strategy”, “targets” or “believes”, or variations of such words and phrases or statements that certain future conditions, actions, events or results “will”, “may”, “could”, “would”, “should”, “might” or “can”, or negative versions thereof, “be taken”, “occur”, “continue” or “be achieved”, and other similar expressions, identify statements containing forward-looking information. Statements of forward-looking information in this press release include, without limitation, statements with respect to: the initial and further investments in SMV, the expected source of funding thereof and results therefrom; SMV’s intended investment mandate and geographic focus; the Company’s acquisition strategy; SMV leadership; and the anticipated impact of the acquisitions of Nørdlight and Hoot Reading.

Forward-looking statements are necessarily based upon management’s perceptions of historical trends, current conditions and expected future developments, as well as a number of specific factors and assumptions that, while considered reasonable by management as of the date on which the statements are made in this press release, are inherently subject to significant business, economic and competitive uncertainties and contingencies which could result in the forward-looking statements ultimately being incorrect. In addition to any factors and assumptions set forth above in this press release, the material factors and assumptions used to develop the forward-looking information include, but are not limited to: the Company’s investments in SMV will produce the expected results; internal cash flow will be sufficient to fund the Company’s initial investment in SMV; the availability of investment prospects for SMV that fits its intended mandate and geographic focus; ability of factories to manufacture products, including labour size and allocation, tooling, raw material and component availability, ability to shift between product mix, and customer acceptance of delayed delivery dates; that the program designed to gain operational efficiencies will achieve the desired results; that the steps taken will create long term shareholder value; the expanded use of advanced technology, robotics and innovation the Company applies to its products will have a level of success consistent with its past experiences; the Company will continue to successfully secure broader licenses from third parties for major entertainment properties consistent with past practices; the expansion of sales and marketing offices in new markets will increase the sales of products in that territory; the Company will be able to successfully identify and integrate strategic acquisition opportunities; the Company will be able to maintain its distribution capabilities; the Company will be able to leverage its global platform to grow sales from acquired brands; the Company will be able to recognize and capitalize on opportunities earlier than its competitors;  the Company will be able to continue to build and maintain strong, collaborative relationships; the Company will maintain its status as a preferred collaborator; the culture and business structure of the Company will support its growth; the current business strategies of the Company will continue to be desirable on an international platform; the Company will be able to expand its portfolio of owned branded intellectual property and successfully license it to third parties; use of advanced technology and robotics in the Company’s products will expand; access of entertainment content on mobile platforms will expand; fragmentation of the market will continue to create acquisition opportunities; the Company will be able to maintain its relationships with its employees, suppliers and retailers; the Company will continue to attract qualified personnel to support its development requirements; and the Company’s key personnel will continue to be involved in the Company products and entertainment properties will be launched as scheduled and that the risk factors noted in this press release, collectively, do not have a material impact on the Company.

By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. Known and unknown risk factors, many of which are beyond the control of the Company, could cause actual results to differ materially from the forward-looking information in this press release. Such risks and uncertainties include, without limitation, the magnitude and length of economic disruption as a result of the COVID-19 pandemic; risks related to acquisitions not producing expected results; and the factors discussed in the Company’s disclosure materials, including the Company’s annual and most recent interim Management’s Discussion and Analysis, and the Company’s most recent Annual Information Form, filed with the securities regulatory authorities in Canada and available under the Company’s profile on SEDAR (www.sedar.com). These risk factors are not intended to represent a complete list of the factors that could affect the Company and investors are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements.

There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.

More information on Spin Master Ventures can be found at www.spinmasterventures.com or ventures @spinmaster.com; Media Contact: Tammy Smitham, VP Communications and Corporate Citizenship, mediarelations@spinmaster.com; Investor Contact: Sophia Bisoukis, VP Financial Reporting and Investor Relations, sophiab@spinmaster.com

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