Mattel Buying S.F. Firm That Makes Sports Toys

Mattel Inc. said Tuesday that it is adding to its toy box by purchasing a small but hot San Francisco company that specializes in the fast-growing area of sports toys.

Mattel Chairman and Chief Executive John W. Amerman said the El Segundo-based company has agreed to buy Aviva Sport Inc., which makes scaled-down, foam-covered sports equipment for children. Terms of the deal, which is expected to close within a month, were not disclosed.

“We’re concentrated and doing very well in girls’ toys,” Amerman said. But analysts say that Mattel’s boys’ business is lackluster.

Analysts contend that Barbie accounted for at least half of Mattel’s record 1990 revenues of $1.47 billion. When added to Mattel’s die-cast vehicle line, chiefly the Hot Wheels business, the company is competing in only about 1/3 of the toy industry, Amerman said.

“One of our strategies is to get into businesses we don’t participate in,” and activity toys is such an area, he said.

Analyst David S. Leibowitz, who follows Mattel for American Securities in New York, said he expects Aviva to begin making a “favorable contribution” to Mattel within a year.

Duff & Phelps analyst Carol I. Palmer noted that Mattel has a great deal of cash it needs to invest. Aviva, however, is not a major purchase and “is not going to change Mattel’s profile.”

“They’re making an effort in boys’ toys, but obviously with Barbie--how can you ever match that?” Palmer asked.

Aviva was founded 2 1/2 years ago. Its brightly colored line of “Sport-Toys” includes equipment for golf, tennis, football, baseball, basketball and soccer. The toys are covered with foam to make them safer and easier to grip. Aviva will have revenue of between $10 million and $15 million.