Mattel announces acquisition of HIT

Kolkata, Oct 25 (IBNS) Leading toy maker Mattel, Inc. (NASDAQ:MAT) has entered into an agreement to acquire HIT Entertainment,leading independent children's entertainment producers and rights-owners, for $680 million in cash from a consortium led by Apax Partners funds.

HIT Entertainment owns a global portfolio of popular pre-school 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 amortization.

"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(R) and American Girl," said Robert A. Eckert, chairman and chief executive officer 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," 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(R). It is fitting that the world's premier toy company should become the owner of the world's premier pre-school property."

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.

The transaction 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, including the addition of Thomas & Friends(R) wood business in 2013 and retention of Thomas & Friends plastic and die-cast business from 2015 onwards.

The transaction is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.