Elmsford, NY (May 8, 2007) - Amscan Holdings Inc., (“AHI”) today reported that it’s wholly owned subsidiary Amscan Inc. (“Amscan”), has entered into a five-year Supply Agreement (the “Supply Agreement”) with M.G. Novelty Company, Inc. (“M.G. Novelty”) which presently operates five (5) retail party stores under the name Party Galaxy in the Oklahoma City, OK trade market. The Supply Agreement gives M.G. Novelty the right to receive more favorable pricing and trade terms over the term of the agreement than what is generally available to it under its current terms with Amscan. In exchange, the Supply Agreement obligates M.G. Novelty to purchase increased levels of merchandise from Amscan until 2012. The Supply Agreement provides for a ramp-up period during 2007 and 2008 and, beginning with 2009, requires M.G. Novelty to achieve merchandise purchases from Amscan equal to $1,500,000, on an annual basis.
James Harrison, President of AHI, commented, "This Supply Agreement with M.G. Novelty, which extends to 2012, affords us the opportunity to strengthen our support with a long standing, independently-owned trade customer.
In a related, but separate transaction AHI also announced the sale of all six (6) Oklahoma City Party America stores to M.G. Novelty. The stores acquired by M.G. Novelty will be renamed under the Party Galaxy trade name and result in their independent ownership of eleven (11) retail party stores in the Oklahoma City trade market.