Die Cuts With A View announced Friday, June 10th, that they have acquired the assets and intellectual property of the Blue Moon Beads brand from Westrim, Inc., which filed for Chapter 11 reorganization bankruptcy on April 29th.
Westrim had previously divested itself of scrapbook brands Westrim, Autumn Leaves, DMD and Crop In Style in February 2010 by selling them to ANW/Crestwood. (To be clear: the Westrim product line is no longer associated with Creativity, Inc. subsidiary Westrim, Inc., which is the company that filed bankruptcy in April.) At the time of that sale, Westrim, Inc. cited a desire to focus on growing its Blue Moon Beads brand as the reason for the transaction. However, bankruptcy court records now reveal that the Blue Moon brand was also put up for sale almost immediately upon the closing of the sale of the scrapbook brands to ANW/Crestwood.
Bankruptcy paperwork filed by Westrim on April 29th indicates the sale of Blue Moon’s assets to DCWV was already in progress at that time, and that completing the transaction was necessary to prevent the company filing for a Chapter 7 (liquidation) bankruptcy. Court filings say the Chapter 11 filing was necessary even with the impending sale to create time for the transaction to occur, and for creating a clear title to Blue Moon for completing its sale to DCWV. The company apparently plans to use the proceeds from the sale of Blue Moon to essentially liquidate itself out-of-court and reimburse its creditors and shareholders.
Blue Moon Beads will operate as a division of Utah-based DCWV, Inc. The majority of its operations will continue to be run out of its existing California offices.
Mike Hill, CEO of DCWV Inc., said, “We see this acquisition as a natural progression for the company as it further solidifies our position as an industry leader in design and innovation. It underscores our commitment to diversifying our product offerings while maintaining the highest level of standards with regard to quality, functionality and aesthetics.”
“We believe Blue Moon Beads is an ideal fit for DCWV, and we’re thrilled to be partnering with them,” said Nancy Hill, founder of DCWV Inc. “Not only are we adding a great line of new products to our existing line of DCWV products, we also have the privilege of assuming a great team of experienced and seasoned professionals. This is a very exciting time for our company.”
Court filings indicate Blue Moon Beads was purchased for $2.5 million in immediate cash payments, a $250,000 payment due in 2012, and then as much as $12.5 million in earn-out payments depending on sales in 2011 and 2012.
Blue Moon Beads is heavily dependent on contracts from Michaels Stores according to bankruptcy court filings. DCWV is well-known in the crafts industry for its paper products, especially their paper stacks and boxes of cards, which are widely available in craft chain stores. Combining the brands may allow for reduction of costs in areas of infrastructure that are required for dealing with the large chain stores, while also broadening the market base of DCWV, which has been heavily tied to the paper crafts market. Several other paper crafts companies, such as Making Memories and EK Success, have expanded into the bead market in recent years with mixed results.
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