Mattel Acquires HIT Entertainment

EL SEGUNDO: Mattel has entered into a deal to acquire HIT Entertainment, which has a portfolio that includes the hit preschool brands Thomas & Friends, Barney and Bob the Builder, for $680 million in cash from a consortium led by Apax Partners funds.

HIT, which brings in some $180 million in revenues, houses the hit Thomas & Friends, created more than 65 years ago. Mattel currently markets many Thomas & Friends toy products under a license from HIT that extends through 2014. Other top HIT brands joining the Mattel portfolio include Barney, Bob the Builder, Fireman Sam and Angelina Ballerina. The deal does not include HIT’s interest in the cable network Sprout.

“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,” said Robert A. Eckert, the chairman and CEO of Mattel. “Thomas & Friends routinely ranks among the world’s leading preschool toys. Additionally, with more than half of the Thomas & Friends revenue generated 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.”

“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,” commented Jeffrey D. Dunn, the president and CEO of HIT Entertainment. “Mattel is a wonderful steward of brands and a great home for the outstanding properties HIT has developed and grown, including Thomas & Friends. It is fitting that the world’s premier toy company should become the owner of the world’s premier preschool property.”

Irina Hemmers, a partner in the Apax Media team, commented: “We are very pleased that this strong portfolio of iconic brands will continue to flourish in the hands of Mattel. Fisher-Price already produces HIT’s toys under license so the two companies know each other well and there is considerable industrial logic in this combination. I would like to thank the employees and the management team for ensuring that HIT’s brands achieved their leading global position in the preschool character space. We wish the whole company every success for the future.”

Eckert added, “We work in a creative business and understand the value of strong and talented leaders, teams, and people. HIT Entertainment has a great talent base with strong competencies in content production, management and licensing. The addition of the HIT Entertainment team will complement our licensing business and also augment our capabilities on the content side.”