The world's leading toy maker Mattel is to buy HIT Entertainment, the maker of popular pre-school toys, for $680m in cash.
HIT Entertainment, which owns the rights to popular brands including Thomas the Tank Engine, is owned by a consortium led by investment firm Apax Partners.
HIT Entertainment has more than $180m of revenues and is one of the largest independent owners of pre-school intellectual property.
"Mattel is the right home for Thomas & Friends," said Mattel chairman and chief executive officer Robert Eckert.
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.
Mattel currently markets many Thomas & Friends toy products under a licence that extends to 2014. Its global sales of Thomas & Friends toys are more than $150m, the company said.
The deal, however, does not include HIT Entertainment's interest in the cable network station, Sprout.
