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Barbie Meets Barney: Mattel Buys HIT Entertainment for $680M

The toymaker expects to close a deal to acquire the maker of Thomas & Friends and Bob the Builder by 2012

Barbie and Barney, the purple dinosaur, will soon be living under the same roof. 

Mattel announced Monday that it is shelling out $680 million in cash to acquire HIT Entertainment from a consortium led by Apax Partners funds.

Mattel, the world's largest toymaker and the force behind not just Barbie, but also American Girl and Hot Wheels, will greatly expand its portfolio of brands with the purchase. 

HIT Entertainment has a strong presence among children with its Thomas & Friends, Barney, Bob the Builder, Fireman Sam and Angelina Ballerina brands.

Of particular interest is the success that HIT has had in launching hit television shows around its Barney and Thomas brands.

Like its competitor Hasbro, which helped launch the children's television network the Hub last year, Mattel believes its future is tied to successfully leveraging its brands across the web, movie and television markets. 

The company logs $180 million in revenue, Mattel said, meaning the purchase price equates to a multiple of about 9.5 times trailing earnings before interest, tax, depreciation and amortization.

Mattel said it will finance the purchase with a combination of cash and debt. The deal is expected to close in the first quarter of 2012.