Barbie dolls owner Mattel, Inc. (MAT) is close to acquiring U.K.-based media firm Hit Entertainment from private equity firm Apax Partners for about 500 British pounds or $790 million, according to the Wall Street Journal on Monday. The deal is expected to be announced as early as this week. Meanwhile, Mattel, and Apax have declined to comment on the reports.
Launched in 1989, Hit Entertainment is one of the world's 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.
Hit Entertainment's businesses include television, video and movie production, content distribution, publishing, consumer products licensing, live events and attractions. Hit Entertainment went public in 1997, but was taken private by London-based Apax Partners in May 2005 for 489.4 British Pounds or $890 million.
Hit Entertainment is the owner of the Thomas the Tank Engine children's toy and TV-shows. About 80 percent of the company's profits reportedly come from Thomas the Tank Engine. It is also the owner of the Fisher-Price brand.
The reported deal comes at the right time for Mattel for the year-end holiday season, and it is expected to provide it growth opportunities in emerging markets such as China, where Thomas the Tank Engine is already the leading toy among pre-school children.
According to reports, Mattel will likely integrate Hit Entertainment's assets into its Fisher Price toy division, which already holds licensing rights to some Thomas & Friends toys.
Apax Partners had hired Bank of America Merrill Lynch almost a year ago in November 2010 to advise on a possible sale and help out in the auction process. The proposed sale also reportedly attracted other potential bidders such as Hasbro, Inc. (HAS), Walt Disney Co. (DIS) and Viacom, Inc. (VIA) in an auction process that is said to have started in March 2011.
Apax Partners was expecting a price tag of about one billion British pounds initially when it began the sale process a year back. The sale will not include Hit Entertainment's stake in Sprout, a US children's channel, which is a US broadcasting joint venture owned along with Comcast Corp. (CMCSA) and PBS, the US public service broadcaster.
MAT closed Monday's regular trading session at $27.19, down $0.32 or 1.16 percent on a volume of 3.36 million shares.
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