Monday, October 24, 2011
Mattel buys Hit for $680 mil
Toymaker Mattel Monday announced plans to acquire Hit Ent. for $680 million in cash from U.K. private equity firm Apax Partners. Hit, of the U.K., with annual revenue of about $180 million, owns a premier global portfolio of preschool brands, including Thomas & Friends, Barney, Bob the Builder, Fireman Sam and Angelina Ballerina.
El Segundo, Calif.-based Mattel is the company behind Barbie, Hot Wheels, American Girl and a wide array of entertainment-inspired toy lines. Speculation about a deal between the two emerged last week. Mattel already has a contract with Hit through 2014 to license certain plastic Thomas products, whose global sales total more than $150 million, the company said. The deal, it said, will allow it continue to expand the products and reunite two key pieces of the Thomas toy lineup, the plastic and die-cast toys with the wood-based business. "Hit Entertainment owns some of the most loved and trusted preschool brands in the world and under Mattel's leadership, I look forward to seeing them grow to even greater heights," said Hit CEO Jeffrey Dunn. "Mattel is a wonderful steward of brands, and a great home for the outstanding properties Hit has developed and grown." The acquisition does not include Hit's interest in the cable network station Sprout. The transaction is expected to be financed with a combination of cash and debt, and is expected to close in the first quarter of 2012. It is not expected to have a material impact on Mattel's 2012 earnings, but is expected to be increasingly accretive as the benefits of owning these brands are reflected in Mattel's results. "Mattel is the right home for Thomas and friends," said Mattel chief executive Robert Eckert. Hit CEO Jeffrey Dunn added: "It is fitting that the world's premier toy company should become the owner of the world's premier pre-school property." Hit, which was created by the late British media entrepreneur Peter Orton in 1989, was bought by Apax for $890 million in 2005. In the succeeding years the children's content business has been buffeted by declining DVD sales and uncertainties over future TV ad revenues. Contact Variety Staff at news@variety.com
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