Mattel (MAT) to Acquire HiT Entertainment in $680M Deal

Mattel, Inc. (Nasdaq: MAT) announced today 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 ½ times trailing earnings before interest, tax, depreciation and amortization.

Closing is expected in Q112.

HiT is a leading independent children's entertainment producers and rights-owners with an enviable portfolio of brands, including Thomas & Friends, Bob the Builder, Barney, Fireman Sam, Angelina Ballerina, Pingu, Rainbow Magic and Mike the Knight.

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 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. RBC Capital Markets, LLC acted as financial advisor and Latham & Watkins LLP served as legal advisor to Mattel in connection with the transaction. BofA Merrill Lynch acted as financial advisor and Weil, Gotshal & Manges LLP served as legal advisor to HIT Entertainment in connection with the transaction.

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