Jim Henson Productions started negotiations with The Walt Disney Company regarding a possible purchase of the company in the late 1980s. Because of these negotiations, Henson International Television head Peter Orton led a management buyout of the Henson International Television division from Henson in 1989, forming a new company named HiT Entertainment.
HiT continued distributing programming by initially signing Postman Pat and Alvin & the Chipmunks series. The company then financed and distributed Wind in the Willows and the Peter Rabbit animated features. In 1990, Flextech took a 23% share in HiT for about £600,000. The HiT Wildlife division was soon set up to produce nature and wildlife programming which provided the company with 35% of its revenue by the mid-1990s.
HiT also handled international distribution for Lyrick Studios' Barney & Friends. With the success of Barney, HiT began to develop its own programming for the pre-school market. By 1996, HiT was listed on the AIM to raise funding to develop these programs. HiT used the funding to launch HiT Video that produced direct to video programming in the UK only. Bob the Builder was one such character that HiT purchased its TV series rights.
In 1998, HIT formed its own animation production company, HOT Animation, and its Consumers Product Division. Also, BBC signed on as the broadcaster for Bob the Builder. HiT signed a series of USA broadcasting deal starting with Nickelodeon for Kipper and expanded to Starz/Encore (Brambly Hedge and Percy the Park Keeper series), HBO Family (Anthony Ant cartoon series) and Animal Planet channel (Wylands Ocean World wildlife program). Kipper also won the 1998 BAFTA award for Best Children's Animation. To end the year, HIT offered another group of shares.
HIT opened 1999 with 10 first run TV series in the USA and started its consumer products USA subsidiary. In April, Bob the Builder debuted on the BBC as a hit. In July, the company made another public offering of stock. A USA deal for Bob was signed in December with Nickelodeon to start airing in January 2001. Mattel signed a five-year licensing agreement for its development Angelina Ballerina series.
In January 2000, the company split its share five-for-one. HiT which has been looking for an acquisition for a while began talks with Thomas the Tank Engine owner, Britt Allcroft early that year, but fell apart as they could not agree on a price. Bob the Builder continued its success with the number one record in December.
HiT acquired Lyrick Studios in February 2001 while selling Lyrick's money losing publishing operations and extending its Barney-PBS deal. In May, Bob the Builder video launched while the company signed a deal with Sears to have "Bob Shops" in the retail's stores. With the Henson Company's owner EM.TV in financial trouble over its purchase of 50% share in Formula One racing rights, HiT joined a number of companies willing to purchase Henson. In October 2001, HiT's bid for Pingu BV was accepted.
After two years of bids from HiT, Gullane Entertainment's board agreed to be purchased by HiT in 2002 when no white knight could be found. In August 2002, HIT Entertainment Canada, Inc. official opened its office in Toronto.
In March 2003, CCI Entertainment acquired HiT's stake in CCI (part of the Gullane Purchase) and Gullane library rights in Canada.
In 2005, Apax Partners took HiT private purchasing the company for £489.4 million with former BBC director general Greg Dyke becoming chairman.
In 2006, HiT closed its DVD sales and distribution arm in the US and contracted with 20th Century Fox Home Entertainment for DVD distribution. HiT continues to sell and distribute its own DVD content in the UK.
In September 2007, the corporation and Chellomedia formed a join venture to run JimJam children's channel.
In March 2009, HiT Entertainment started its HiT Movies division based in Los Angeles with Julia Pistor as division head to create movies based on the company's franchises.
In early 2010, HiT licensed Thomas & Friends to Mattel for toys. By August, the company withdrew from the JimJam joint venture but would continue providing programming.
In April 2011, Apax put HiT up for sale with option to sell the company in two parts Thomas & Friends franchise and the other HiT characters with its Kids Sprout stake with either parts or separately. Expected bidders were Disney, Viacom, Mattel, Hasbro, Classic Media (now DreamWorks Classics), Chorion and Saban Brands. By April 2011, Fireman Sam was revitalised enough to be a Top 10 UK best-selling character toy according to NPD Group.
Apax Partners group agreed to sell HiT Entertainment to Mattel in October 2011 for $680 million. Its share of Sprout was not included in the deal. The sale/merger was completed on February 1, 2012, and HIT Entertainment became a wholly owned subsidiary of Mattel, managed under its Fisher-Price unit. The Mike the Knight show aired on CBeebies later in the year.