Thomas the Tank Engine chuffs off to LA

Thomas and Friends are off on an American adventure, after they were acquired by Mattel.

by Emma Haslett
Last Updated: 25 Oct 2011
Here’s a deal the Fat Controller would be perfectly justified in grumbling about. Thomas the Tank Engine (and yard-mates like Bob the Builder, Fireman Sam, Angelina Ballerina and Pingu) are puffing off the Island of Sodor and all the way to LA, after their parent company, Hit Entertainment, was acquired by Mattel for a cool $680m (£425m). But Apax, its private equity owners, won’t be getting aboard the party express quite yet: they had hoped its price tag would be nearer the $1bn mark…

You can see why Apax isn’t too happy: it originally acquired Hit for £489.4m in 2005 – which, on top of the $180m-odd it made in revenues annually, would work out at about $890m in today’s money. But when you factor in disposals like its Guinness Book of Records brand, as well as the rather weak pound, Apax has made a loss of about $70m. Which is the sort of figure that would cause the Fat Controller to bust his boiler.

For Mattel, on the other hand, it’s a rather nifty little deal: after all, it already sells Thomas & Friends products under a license from Hit, with global sales of die-cast and plastic toys worth $150m. And, with a third-quarter net profit of $300.8m, it can well afford to finance the deal with a combination of cash and debt. The only worry, of course, is the prospect of some sort of ill-advised alliance with its biggest money-spinner, Barbie. Barbie the builder, perhaps? To be fair, it might do her good to put her to work in an industry that doesn’t involve hairdressing or babies…

The only solace Apax can take is in the fact that it’s not the only company having problems selling off entertainment brands. Earlier this year, Permira put a stop to its attempt to sell off the UK’s largest independent production company, All3Media, after offers proved decidedly disappointing. And let’s be fair: considering the state of the market at the moment, the likelihood is that as time goes on, the frequency of situations like that will only increase…

Find this article useful?

Get more great articles like this in your inbox every lunchtime

What pushy fish can teach you about influence at work

Research into marine power struggles casts light on the role of influence and dominant bosses...

The traits that will see you through Act II of the COVID crisis ...

Executive briefing: Sally Bailey, NED and former CEO of White Stuff.

What's the most useful word in a leader’s vocabulary?

It's not ‘why’, says Razor CEO Jamie Hinton.

Lessons in brand strategy: Virgin Radio and The O2

For brands to move with the times, they need to know what makes them timeless,...

Why collaborations fail

Collaboration needn’t be a dirty word.

How redundancies affect culture

There are ways of preventing 'survivor syndrome' derailing your recovery.