In a move to expand into the fast-growing toy categories of construction sets and arts & crafts, toy giant Mattel has purchased Montreal, Canada-based toyco Mega Brands for US$460 million, including debt.

In a joint statement, Mattel said it has agreed to offer CDN$17.75 (US$16.03) per Mega Brands share, and shareholders owning 39% of Mega’s stock – Toronto investment firm Fairfax Financial, Victor Joseph Bertrand, Mega’s president, and CEO Marc Bertrand and Vic Bertrand – have agreed to vote in favor of the deal. Mega’s board of directors has also unanimously approved the deal.

Mattel plans to fund the acquisition through a combination of new debt and cash.

The friendly takeover brings Mega Brands’ popular construction brand Mega Bloks and its licensed kids brands including Skylanders, Power Rangers, Hello Kitty and SpongeBob SquarePants into Mattel’s portfolio, which currently houses Barbie, Hot Wheels, Monster High, American Girl, Thomas & Friends and Fisher-Price brands.

Mattel will also look for global opportunities in the booming arts & crafts category with the acquisition of Mega’s significant business in the sector, represented by its Rose Art and Board Dudes brands.

For 2013, Mega Brands states its estimated net sales were US$405 million, and according to research firm NPD, the company was among the top 15 toy companies in the world in terms of sales.

Mattel expects to keep Mega’s head office in Montreal and maintain its design and manufacturing production facilities located in Tennessee and Montreal. Mega Brands currently has 1,700 employees in 17 countries.

The acquisition comes on the heels of a disappointing US holiday season for Mattel, which saw its global sales decline by 6%.