HIT Entertainment, the group behind popular children’s TV and book characters Thomas the Tank Engine and Bob the Builder amongst others, is being prepared for a partial or complete sell-off by private equity owners Apax Partners.
Apax had to renegotiate its borrowings for HIT when it experienced a fall in demand during the economic downturn. DVD sales in the US in particular took a nosedive. It has begun to work with the banks on the anticipated business sale.
Apax bought the children’s media rights business in March 2005 in a deal worth around £489 million.
Either Thomas, the most valuable asset, or the whole business will be put up for sale early in 2011. It is hoped that the disposal of Thomas will pay off a considerable proportion of the £300 million debt attached to the business.
It is considered highly likely that Disney and Viacom will put in a bid approach for HIT, which also owns Barney the Dinosaur, Fireman Sam and Pingu, purchased by HIT in 2001 for £16 million.
Established in 1989, London-based HIT Entertainment Limited posted revenues of £21.692 million for the year to 31 July 2009, down from £25.578 million for the previous year.