Date Closed

July 26, 2005

Lead Office

Montréal

Value

350.00 Million CAD

On July 26, 2005, Mega Bloks Inc. completed the transaction announced on June 15, 2005 to acquire all of the issued and outstanding shares of the Rose Art Group of companies, a U.S. leader in children’s craft kits and magnetic building sets, for consideration consisting of US$295 million in cash, US$20 million of Mega Bloks common shares and the assumption of approximately US$35 million of outstanding debt. The cash portion of the acquisition was funded primarily by a US$400 senior credit facility arranged by The Bank of Nova Scotia and Bank of Montreal, which includes a US$100 million revolving credit facility for working capital purposes. The balance of the acquisition funding was derived from a CDN$68,975,000 private placement of subscription receipts led by BMO Nesbitt Burns Inc., which closed on July 11, 2005. Upon the completion of the acquisition, the subscription receipts were exchanged for common shares of Mega Bloks.

McCarthy Tétrault advised the lenders to Mega Bloks with a team that was led by Michel Deschamps.