Team17, a global video games company, has agreed a deal to buy Irish company StoryToys for an initial consideration of $26.5m.

The two companies said that a further $22.5m is payable in cash on delivery of certain targets within three years following completion of the deal and will be funded from Team17's existing cash reserves.

Founded in 2011 and based in Ireland, StoryToys develops educational apps for two to seven years old.

It has produced apps with many leading children's brands, including Lego, Disney, Pixar, Penguin, Sesame Workshop, Dick Bruna, Warner Bros, Hasbro and Nickelodeon.

Its apps have been downloaded over 100 million times across 120 countries, and its educational entertainment apps are produced in as many as 28 different languages.

Team17 said the deal establishes a new highly complementary and fast growing "edutainment vertical"for the company, strengthening the enlarged group's position as a leading games entertainment business.

Emmet O'Neill, CEO of StoryToys, said that Team17 is the perfect home for StoryToys as the company enters into this "incredible new chapter".

"Our goal is to be the number one provider of edutainment content for young children. Collaborating with Team17 will make that a faster and more exciting journey," Mr O'Neill said.

"We believe in creating the best possible digital learning experiences for children. We look forward to the possibilities that are opened up by collaborating with what we believe to be the best partner to deliver our ambitions," he added.

"I am thrilled to be welcoming StoryToys into the Team17 family and believe our shared culture and values perfectly align. In StoryToys, we are acquiring a highly creative and successful team whose ability to both entertain and educate children is truly best in class," commented Debbie Bestwick, CEO of Team17.

"Their track record is without question but the depth of talent that exists within the business gives us an unrivalled position within a hugely exciting and high growth edutainment area," she added.