(Reuters) - Toy maker Hasbro Inc has agreed to acquire children’s entertainment and merchandising franchises, including the characters of the superhero TV show Power Rangers, from Saban Properties LLC in a deal valued at $522 million in cash and stock, the companies announced Tuesday.
The deal comes as Hasbro, which is the world’s largest toy maker with a stable of franchises including “My Little Pony,” “Monopoly” and “The Transformers,” seeks to reverse its losses following the bankruptcy last year of U.S. toy retailer Toys R Us.
In addition to making toys and action figures, Hasbro profits from such franchises through the production of movies and TV series, allowing it to diversify its revenue beyond retail sales.
The deal with Saban Properties was first reported by Reuters earlier on Tuesday.
Under the agreement, Hasbro will launch its first set of products off the Saban franchises, which include Luna Petunia, Julius Jr and Popples, in 2019.
Launched as the “Mighty Morphin Power Rangers” live-action TV show in 1993, the franchise was created by Haim Saban, owner of Saban Properties.
The TV series gave rise to a line of action figures and other merchandise, plus three movies, including “Saban’s Power Rangers” last year. The 2017 film, distributed by Lions Gate Entertainment Corp, sold $142 million worth of tickets worldwide, according to Box Office Mojo.
Earlier this year, Hasbro signed a deal with Saban for the toy maker to design, produce and bring to market a wide variety of toys and role-play items inspired by Power Rangers.
Pawtucket, Rhode Island-based Hasbro has taken several steps to boost its presence in the entertainment business as a way to fuel toy sales.
The company operates Hasbro Studios, which produces TV shows such as the Netflix Inc series, “Stretch Armstrong and the Flex Fighters.”
The toy industry’s traditional players have been undone in recent years by a shift toward thousands of rival, smaller producers selling on Amazon and other e-commerce sites, as well as kids’ preference for electronic games over physical toys.
Last week, Hasbro reported a net loss attributable to the company of $112.5 million, or 90 cents per share, in the first quarter ended April 1, compared with a profit of $68.6 million, or 54 cents per share, a year earlier.
In 2014, Hasbro held merger discussions with DreamWorks Animation SKG Inc, the studio behind “Shrek,” but DreamWorks was subsequently bought by Comcast Corp.
Last year, the toymaker also held talks to acquire U.S. movie studio and entertainment company Lions Gate, but those negotiations broke down over price, sources said at the time.
Hasbro has been seeking scale, and has attempted unsuccessfully to merge with peer Mattel Inc over the years, most recently in 2017. Adding to the sense of crisis in the toy sector, Mattel appointed its fourth chief executive in three years last week.
J.P. Morgan Securities LLC served as the financial adviser to Hasbro, according to the announcement.
Reporting By Jessica Toonkel in New York; Additional reporting by Lisa Richwine in Los Angeles and Liana B. Baker and Greg Roumeliotis in New York; Editing by Bernadette Baum and Frances Kerry