HIT, which was put up for sale by a consortium led by Apax Partners in April, boasts more than $180m of annual revenues, meaning Mattel's purchase price is around nine and a half times the firm's earnings before interest, tax, depreciation and amortisation.
Mattel intends to further exploit toy opportunities around HIT's leading pre-school brands, such as Thomas & Friends, Barney, Bob the Builder, Fireman Sam and Angelina Ballerina.
Rival toy maker Hasbro was also thought to be in the running for HIT before Mattel sealed the deal, along with Mr Men and Noddy owner Chorion, Disney and Viacom.
"Mattel is the right home for Thomas & Friends. This powerhouse brand is joining the ranks of such iconic brands as Barbie, Hot Wheels, Fisher-Price and American Girl," said Robert A. Eckert, the firm's chairman and chief executive officer.
"Thomas & Friends routinely ranks among the world's leading preschool toys. Additionally, with more than half of the Thomas & Friends revenue generated from non-toy products, this transaction will marry Mattel's global marketing, distribution and brand management capabilities with HIT Entertainment's global programming and licensing expertise to accelerate growth of the combined portfolio."
HIT Entertainment president and chief executive officer Jeffrey D. Dunn added: "HIT Entertainment owns some of the most loved and trusted preschool brands in the world and under Mattel's leadership, I look forward to seeing them grow to even greater heights.
"Mattel is a wonderful steward of brands and a great home for the outstanding properties HIT has developed and grown, including Thomas & Friends. It is fitting that the world's premier toy company should become the owner of the world's premier pre-school property."
Mattel already produces many Thomas & Friends toy products under a license deal with HIT, which extends through 2014 and has already resulted in sales generating $150m.
The US firm said that the acquisition will allow it to bring together two parts of the Thomas & Friends toy business - plastic and die-cast toys with the wood-based toys (for which its licence deal was due to expire in 2012).
The firm will also benefit from HIT's various licenses with broadcasters around the world, but the acquisition does not include HIT's interest in the cable network station Sprout.
Eckert added: "We work in a creative business and understand the value of strong and talented leaders, teams, and people. HIT Entertainment has a great talent base with strong competencies in content production, management and licensing. The addition of the HIT Entertainment team will complement our licensing business and also augment our capabilities on the content side."
The transaction is expected to be financed with a combination of cash and debt and to close in the first quarter of 2012 after all legal and regulatory hurdles have been completed.
> Bob the Builder, Fireman Sam mobile apps to launch