UPDATE 1-Fisher-Price signs licensing deal for HIT's Thomas
(Adds analyst comment)
CHICAGO, Jan 5 (Reuters) - Mattel Inc's MAT.N Fisher-Price brand signed a multi-year deal as the global toy licensee for HIT Entertainment's Thomas & Friends train product line, in a move to boost sales globally, the companies said on Monday.
Financial terms of the deal, which covers multiple territories around the world, were not disclosed. The first products will be available in 2010, when the Thomas line celebrates its 65th anniversary, and offerings will expand as existing licensees' rights expire, the companies said.
"Aligning one of the world's most successful and preeminent preschool brands with the world's largest toy company is ... a natural evolution," HIT Entertainment Chief Executive Jeff Dunn said in a statement.
HIT Entertainment, owned by private equity investment group Apax Partners, has a portfolio that includes such properties as Barney, Bob the Builder and Angelina Ballerina.
Fisher-Price, which makes products for young children, has been granted the global rights for Thomas, excluding Japan, on vehicles, figures and play-sets; preschool toys; plush, games, puzzles and water toys; and battery-powered ride-ons, the companies said. The deal also covers plastic pedal tricycles, but only in North and South America and Asia.
The deal does not include the Thomas wooden track system rights, which remain with RC2 Corp (RCRC.O).
RC2 stands to lose up to $55 million in annual sales, or 12 percent of the total, and about 35 cents per share in profit with the loss of the die cast license transfer in 2010, Caris & Co analyst Linda Bolton Weiser estimated in a research note.
The bigger concern is the possible loss of the wooden Thomas railway license, which runs through 2012, she said.
RC2 plans to make up for lost revenue with a number of new preschool properties, including "Super Why" and a new train play property partially owned by RC2 called "Chuggington," she said. Weiser said the company could provide disappointing 2009 guidance in early February.
Shares of RC2, which was hurt in 2007 by recalls of lead-tainted Thomas products, dropped 32.81 percent, or $3.52, to $7.21 on Nasdaq. Top U.S. toymaker Mattel's stock fell 30 cents to $16.35 on the New York Stock Exchange. (Reporting by Ben Klayman, editing by Matthew Lewis, Richard Chang)
