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Reply to "Atlas' Acquisition of MTH Tooling"

@Landsteiner posted:

We won't ever know, but it would be interesting to know the terms of the agreement.  Seems unlikely to me a big capital expenditure was involved, given the state of the market. I'd guess this is a licensing agreement that allows Atlas to produce MTH products at the Chinese factory or factories currently producing these products.  Based upon production numbers, not outright purchase of tooling most likely.  Thus if the first production runs don't do well, we may not see much in future.  Just a consideration for those who want to see this succeed. Buy the first production runs if you want to see future production runs. Not rocket science .

I think the truly under-valued aspect of this deal is Atlas' acquisition or access to the MTH production facilities.  A few years ago, Atlas acquired a number of Weaver molds, tooling, and products - we've yet to see anything from that.  Maybe the access to MTH factories will actually result in shipping product (what a concept!  ).  So far, Atlas has only demonstrated their ineptness in this regard.

As for acquiring DCS, I've no idea why they would spend money on that. To my mind, it would be a much smarter move to offer the very pretty MTH locomotives as either conventional ("command ready") or TMCC equipped.

I doubt that Atlas' or anyone else's TMCC licensing agreements with Lionel expressly prohibit the licensee from acquiring a competitive train control system, but annoying Lionel in such a way doesn't strike me as particularly advantageous.

George

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