Is that a marshmallow in your pocket?

It seems certain the volatility in debt and equity markets will create a hiatus in deal-making activities. But not, it would seem, in demand for new toys, or at least in rapid-fire marshmallow guns.

A Perth-based company called Brain Toys, chaired by a local investment banker Charles MacKinnon, has announced the purchase of MFC, a three-year old company established by a group of people with no toy industry experience, but with a good idea and another friend who was a gunsmith.

According to MacKinnon, who still runs his own boutique advisory firm Lothbury, the marshmallow gun brilliantly captures two of America's great loves – that of sweet food and firearms.

MFC produces a range of marshmallow weapons, including a blower, a pump-action blaster and a 'bow and mallow', which can all apparently fire 25 marshmallows before reloading, can shoot accurately over 10 metres and will appeal to kids and adults alike.

Mackinnon says they are great for parties. "You just hand out 20 of these and you won't see them again,” he says. And they shouldn't lead to any whingeing. "I think most kids would be too embarrassed to cry about being hit in the face with a marshmallow.”

Brain Toys, which is set on an acquisitive path after merging a bunch of retailing and production platforms, paid $US4 million for MFC, plus minimum royalty payments of $2.5 million over the next 5 years. It partly funded the purchase with an issue of shares.

MFC had generated sales of more than $3 million, but its lack of expertise in the industry and ability to deal with Chinese manufacturers meant it suffered production bottlenecks. Mackinnon expects sales of $50 to $100 million could be possible within a few years.