Children’s entertainment company Spin Master has agreed to acquire its rival company Melissa & Doug for $950 million, with the transaction expected to close in the first quarter of FY24.

The acquisition will boost Spin Master’s position in the children’s entertainment industry as it will diversify the company’s portfolio across new channels and formats.

Spin Master plans to finance the acquisition with about $450 million in balance sheet cash and $500 million in debt financing.

“As a trusted brand of early childhood toys with an evergreen portfolio, Melissa & Doug will expand Spin Master’s presence in new categories, providing immediate revenue growth, broader reach in all retail channels and market coverage,” said Max Rangel, global president and CEO at Spin Master.

“The addition of Melissa & Doug is highly complementary and connects with our strategic vision to reimagine everyday play, providing a compelling platform for long-term growth through innovation, while also meeting the changing demands of children and parents of the future.”