Barbie and Thomas make friends as Mattel seals $680m acquisition

US toy giant buys Britain's leading children's TV company, reports James Thompson

Bob the Builder and Thomas the Tank Engine have made new friends with Barbie after Mattel – the world's biggest toy maker – acquired the British TV production company Hit Entertainment for $680m (£427m) in cash.

Mattel, which also operates Fisher-Price toys, has agreed a deal to buy Hit Entertainment and its intellectual property and marketing rights from a private equity fund led by Apax Partners, following a protracted auction process that kicked off in March.

Robert Eckert, the chief executive of Mattel, said: "Mattel is the right home for Thomas & Friends."

However, the price paid by Mattel falls way below the reported valuation of Hit when details of the auction process first emerged last year. Indeed, Apax bought the operator of the pre-school brands in a £490m deal in 2005, which would have equated to nearly $900m at that time.

The new deal does not include Hit's interest in the cable network station Sprout. But it will allow Mattel to expand Hit Entertainment's brands, which also include Fireman Sam, Pingu Angelina Ballerina and Barney in emerging markets such as China.

Thomas & Friends is Hit's premier brand and accounts for nearly 80 per cent of its profits. Mr Eckert said: "Thomas & Friends routinely ranks among the world's leading preschool toys."

More than half of the revenues from Thomas & Friends are generated from non-toy products.

Frederique Tutt, a toys analyst at NPD Group, stressed the importance of new media, such as TV channels, with the Hit deal for Mattel.

He said: "Kids nowadays live in a world where media and new media play an important role, so to keep a character relevant, the owner needs to have a multimedia approach and create content for the character to stay top of mind with children. Mattel's move on Hit Entertainment with Thomas the Tank Engine in its portfolio – Mattel is already master toy licensee for Thomas – is another step towards this new shaping up of the kids' entertainment market and should strengthen Mattel's position, not only in the toy business but outside it in the entertainment industry alongside Disney and other big studios."

The $680m price paid by Mattel equates to an earnings multiple of 9.5 times underlying earnings at Hit, which has annual revenues of $180m. Mattel , based in El Segundo, California, employs 31,000 in 43 countries and has worked with Hit for a number of years. Under existing licences, Fisher-Price already makes Hit's toys and Mattel markets many Thomas & Friends toys globally. While Mattel's global sales for Thomas & Friends' die-cast and plastic toys are above $150m, the acquisition will allow Mattel to add the licence for wood-based toys when that licence expires at the end of 2012.

Mattel, which will fund the acquisition with a combination of cash and debt, said it expected the deal to close in the first quarter of 2012, subject to expected anti-trust approval.

PROMOTED VIDEO
News
Ian Thorpe had Rio 2016 in his sights
people
Arts and Entertainment
Original Netflix series such as Orange Is The New Black are to benefit from a 'substantial' increase in investment
TVHoax announcement had caused outrage
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

News
One Direction star Harry Styles who says he has no plans to follow his pal Cara Delevingne down the catwalk.
peopleManagement confirms rumours singer is going it alone are false
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Voices
Mrs Brown's Boy: D'Movie has been a huge commercial success
voicesWhen it comes to national stereotyping, the Irish know it can pay to play up to outsiders' expectations, says DJ Taylor
Arts and Entertainment
Curtain calls: Madani Younis
theatreMadani Younis wants the neighbourhood to follow his work as closely as his audiences do
Arts and Entertainment
'Deep Breath' is Peter Capaldi's first full-length adventure as the twelfth Doctor
TVFirst episode of new series has ended up on the internet
Life and Style
Douglas McMaster says the food industry is ‘traumatised’
food + drinkSilo in Brighton will have just six staple dishes on the menu every day, including one meat option, one fish, one vegan, and one 'wild card'
Sport
Mario Balotelli, Divock Origi, Loic Remy, Wilfried Bony and Karim Benzema
transfersBony, Benzema and the other transfer targets
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Trade Desk Specialist (FIX, Linux, Windows, Network Security)

£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

Service Desk Analyst (Windows, Active Directory, ITIL, Reuter)

£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...

Day In a Page

Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor
Gavin Maxwell's bitter legacy: Was the otter man the wildlife champion he appeared to be?

Otter man Gavin Maxwell's bitter legacy

The aristocrat's eccentric devotion to his pets inspired a generation. But our greatest living nature writer believes his legacy has been quite toxic
Joanna Rowsell: The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia

Joanna Rowsell: 'I wear my wig to look normal'

The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia
Bill Granger recipes: Our chef gives raw ingredients a lift with his quick marinades

Bill Granger's quick and delicious marinades

Our chef's marinades are great for weekend barbecuing, but are also a delicious way of injecting flavour into, and breaking the monotony of, weekday meals
Germany vs Argentina World Cup 2014 preview: Why Brazilians don't love their neighbours Argentina any more

Anyone but Argentina – why Brazilians don’t love their neighbours any more

The hosts will be supporting Germany in today's World Cup final, reports Alex Bellos
The Open 2014: Time again to ask that major question - can Lee Westwood win at last?

The Open 2014

Time again to ask that major question - can Lee Westwood win at last?