Cookie Jar Group has agreed to purchase L.A.-based DIC Entertainment in a deal worth roughly US$87.6 million.

Upon closing, DIC will be de-listed from London’s AIM Exchange and will continue to operate as a subsidiary of Cookie Jar, which will remain a wholly private company. With the transaction, Toronto, Canada’s Cookie Jar assumes a forecasted debt of US$42 million and associated fees and expenses of US$14.1 million. Fees and expenses include US$4.5 million in transaction bonuses payable to some DIC executives.

The transaction creates one of the world’s largest independent children’s entertainment and education companies with a stable of proprietary and licensed brand and an animation library of some 6,000 half-hours.

The deal gives Cookie Jar access to the merchandising and licensing rights to brands such as American Greetings’ Strawberry Shortcake, which has earned US$3 billion at retail since DIC re-launched the brand in 2004; Mommy & Me, a parent-oriented, direct-to-retail product line featured at Wal-Mart; as well as Inspector Gadget, Horseland and Cake.

In addition, DIC has partnerships with global brands such as McDonald’s, General Mills and Wal-Mart. The merger will also include DIC’s one-third interest in KidsCo, an international children’s television channel that currently has five million subscribers. NBC-Universal and Corus Entertainment are also partners in KidsCo.

DIC’s 2006 acquisition CPLG, a Pan-European licensing agency, is also part of the deal.

DIC has been rumored to have been on the block for several months. It’s last fiscal tally for 2007 showed the company experiencing some financial hardship, reporting an 8.6% decline in net annual revenue to US$74.7 million and a net loss of US$36.6 million.

Subject to approval by DIC’s shareholders and other regulatory hurdles, the transaction is expected to close this fall.