Mattel buys Hit Entertainment - it's official
Mattel, Inc. has announced that it has entered into an agreement to acquire HIT Entertainment for $680 million in cash from a consortium led by Apax Partners funds
HIT Entertainment owns a global portfolio of popular preschool brands, including Thomas & Friends®, Barney®, Bob the Builder®, Fireman Sam® and Angelina Ballerina®. With more than $180 million of revenues, HIT Entertainment represents one of the largest independent owners
of preschool intellectual property. The purchase price equates to a multiple of about 9 1⁄2 times trailing earnings before interest, tax, depreciation and amortisation.
“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, chairman and chief executive officer of Mattel. “Thomas & Friends® routinely ranks among the world’s leading pre-school 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,” said Jeffrey D. Dunn, president and chief executive officer 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 pre-school property.”
Mattel currently markets many Thomas & Friends® toy products under a license from HIT Entertainment which extends through 2014. Mattel’s global sales of Thomas & Friends® die-cast and plastic toys are more than $150 million, and Mattel believes that this transaction will allow the company to continue to expand and grow these product lines into the foreseeable future. Another key advantage to the acquisition is that Mattel will be able to reunite two key pieces of the Thomas & Friends® toy business: plastic and die-cast toys with the wood-based business. The current wood license expires at the end of 2012, at which time Mattel expects to add that line of business to its portfolio. Historically, the sales of wood-based toys have been around half the size of the plastic and die-cast business.
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