Toymaker Mattel Inc. said Monday it agreed to acquire HIT Entertainment for $680 million in cash.
HIT Entertainment owns some of the most popular pre-school brands, including Thomas & Friends, Barney, Bob the Builder, Fireman Sam and Angelina Ballerina. The company had revenues of more than $180 million.
The acquisition does not include HIT Entertainment's interest in the Sprout cable network.
"Mattel is the right home for Thomas & Friends. This powerhouse brand is joining the ranks of such iconic brands as Barbie, Hot Wheels, Fisher-Price and American Girl," Robert Eckert, chairman and CEO of Mattel said in a statement.
Eckert said that more than half of Thomas & Friends revenue comes from non-toy products. "This transaction will marry Mattel's global marketing, distribution and brand management capabilities with HIT Entertainment's global programming and licensing expertise to accelerate growth of the combined portfolio," he said.
"Mattel is a wonderful steward of brands and a great home for the outstanding properties HIT has developed and grown, including Thomas & Friends," said Jeffrey Dunn, president and CEO of HIT Entertainment. "It is fitting that the world's premier toy company should become the owner of the world's premier pre-school property."
HIT said that Thomas & Friends, featuring the trains that chug around the Island of Sodor, was created 65 years ago and has grown to be the No. 1 licensed pre-school property in the world, with television programming, home entertainment products, toys and other consumer products.
Mattel already generates more than $150 million in revenue from global sales of Thomas towns. The company believes that this transaction will allow the company to continue to expand and grow this product lines. It will also enable Mattel to consolidate the Thomas toy business when the license to make wood-based toys expires at the end of 2012.