U.S. toy manufacturer Mattel has bought HIT Entertainment, the debt-laden UK children’s toy licensing company behind Thomas the Tank Engine, for $680 million in cash. That’s around $20 million less than owner Apax Partners had wanted for it, I understand, and around $200 million short of the $890 million that Apax paid for the company back in 2005. The deal gives Mattel a foothold in the television business as the Thomas & Friends TV show airs in more than 20 languages worldwide. Rival toymaker Hasbro already has its own production and distribution arm, Hasbro Studios, and owns joint venture kids network The Hub with Discovery Communications. Given the tight regulations governing toy manufacturers making TV shows in Europe, it remains to be seen how Mattel will fare if it pitches new programs featuring its toys to public broadcasters.
The British children’s rights company, whose kids’ properties include the Nick Jr show Olivia, is set to bid for Thomas the Tank Engine. The bidding process has yet to begin though. Apax Partners, the private equity company which hopes to sell Thomas by spring 2011, wants $700 million (£440 million) for Thomas, according to the Daily Telegraph. That’s double what Apax paid for the children’s property back in 2005, I’m told. When Apax last tried to sell Thomas to Disney it wanted $800 million for the little engine, one insider tells me. Disney walked away. Other potential buyers include Disney (again) or a big independent TV producer/distributor like Fremantle, which wants to get into the children’s TV market.