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A Mattel factory in Mexico. The company had a market capitalization of about $8 billion as of the close of the market Tuesday.

Photo: DANIEL BECERRIL/REUTERS

Mattel Inc. MAT -4.70% has held talks with private-equity firms about a potential sale, people familiar with the matter said, just a few months after the famed toy company declared its corporate turnaround complete.

Mattel has held informal talks with firms including Apollo Global Management Inc. APO -5.96% and L Catterton, the people said. The talks are at an early stage and may not result in a deal.

If there is one, it would be sizable. Mattel had a market capitalization of about $8 billion as of the close of the market Tuesday. It would add to a recent string of big leveraged buyouts, as private-equity firms look to spend a mountain of cash they have accumulated.

Chief Executive Ynon Kreiz said in February that Mattel had completed its turnaround and was “now in growth mode.” Mattel reported a sales jump of 19% in 2021 and said profits rose. Yet its shares have barely budged over the past year and have done little in the past two decades.

On Mr. Kreiz’s watch, sales at the maker of Barbie, Hot Wheels and Fisher-Price toys have stabilized after years of declines and the loss of a key license. The CEO cut a third of its jobs and closed several factories. A former television executive, he also helped to repair Mattel’s relationships with retailers and Hollywood studios.

In January, the company said it had won the license to produce toys based on Walt Disney Co. DIS -3.48% ’s princess lineup and its blockbuster “Frozen” franchise, wresting the properties back from rival Hasbro Inc. HAS -1.43%

Hasbro has had its own troubles. The maker of Nerf and Monopoly is in the middle of a proxy fight with activist investor Alta Fox Capital Management LLC, which is pushing the company to spin off the unit housing Dungeons & Dragons, called Wizards of the Coast and Digital Gaming, and seeking to replace board members.

In 2017, Hasbro made an unsuccessful takeover offer for its rival.

Mattel is scheduled to report first-quarter earnings Wednesday.

Write to Miriam Gottfried at [email protected] and Ben Foldy at [email protected]

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Appeared in the April 27, 2022, print edition as ‘Mattel, Buyout Firms Talk Deal.’

Source: WSJ

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