U.S. toy company Mattel is buying the British children’s TV producer HIT Entertainment, maker of Thomas the Tank Engine, Barney, and Bob the Builder. The $680 million deal gives Mattel control of all HIT’s intellectual property and marketing rights for preschool brands. But it does not include HIT Entertainment’s interest in the cable network Sprout.
Mattel, which makes Barbie and Hot Wheels toys, has been in talks with HIT’s owner, private equity company Apex Partners, for some months. Apex bought HIT for $890 million in 2005.
Toy analyst Gerrick Johnson, from BMO Capital Markets, says Mattel’s acquisition is a good fit for both companies. "If HIT's production capabilities have access to Mattel's brands—Barbie, He-Man, Hot Wheels—imagine what might happen,” he told The Wall Street Journal. “There are a lot of synergies here."
The two companies already have a close relationship. Mattel is already licensed to market Thomas & Friends toy products until 2014, according to The Guardian.
HIT Entertainment’s president and CEO Jeffrey Dunn described Mattel as “a wonderful steward of brands . . . HIT Entertainment owns some of the most loved and trusted preschool brands in the world,” he said in a statement. “Under Mattel's leadership, I look forward to seeing them grow to even greater heights.”
The WSJ reports that around 80 percent of HIT’s profits come from Thomas the Tank Engine.