NEWS

Fuhu agrees to proposed sale to Mattel

Published on: 9th December 2015

The children’s tablet maker filed for bankruptcy on Monday and agreed to a $9.5m sale to Mattel.

Fuhu-480The company, which is known for its nabi-brand tablets, said that it has been crippled by a financial dispute with its manufacturer Foxconn, the contract manufacturer famous for supplying Apple’s iPhones.

Fuhu, which is short on cash and inventory, accepted a $300,000 loan from Mattel to fund bankruptcy proceedings. Mattel said it agreed to purchase Fuhu as part of the deal, but other companies may still submit bids before a judge approves the proposal.

Court documents say Fuhu has talked with high-ranking executives at about 15 potential strategic or financial buyers, including nine firms with which talks have progressed to confidential information-sharing. About 500 potential bidders were initially contacted.

Fuhu’s chief executive Jim Mitchell commented: “We expect to be able to satisfy ongoing obligations to customers, vendors and employees pending the sale and ensure the bright future of the nabi franchise with the proposed acquisition.”

He also said that the company would continue to ship tablets, provide support and honour existing gift cards and agreements. But the company needs quick help to make payroll and keep operating. Fuhu has about $2m in cash, but its lender has restricted the company’s access to it.

The tumble for Fuhu underscores the challenges faced by mobile device makers, with tablet sales renowned for generating small profits amongst fierce competition.

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