The world's leading toymaker Mattel announced on Monday it was purchasing HIT Entertainment, the maker of popular pre-school toys, for $680 million in cash.
HIT Entertainment, which owns the rights on popular including Thomas the Tank Engine, is owned by a consortium led by investment firm Apax Partners.
HIT Entertainment has more than $180 million of revenues and is one of the largest independent owners of preschool intellectual property.
"Mattel is the right home for Thomas & Friends," said Mattel chairman and chief executive officer Robert Eckert.
"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," he said in a statement.
Aside from the popular Thomas train brand, HIT owns popular pre-school brands that include Barney, Bob the Builder, Angelina Ballerina and Fireman Sam.
Mattel owns such popular brands as Barbie, Hot Wheels, Fisher-Price and the American Girl.
Jeffrey Dunn, president and chief executive officer of HIT Entertainment, welcomed the purchase. "It is fitting that the world's premier toy company should become the owner of the world's premier pre-school property," he said.
Mattel currently markets many Thomas & Friends toy products under a license that extends through 2014. Its global sales of Thomas & Friends toys are more than $150 million, the company said.
The purchase however does not include HIT Entertainment's interest in the cable network station, Sprout, HIT said.
The transaction is expected to close in the first quarter of 2012.