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EL SEGUNDO (CBSLA.com) — The world’s biggest toymaker plans to get even bigger by acquiring Canada’s Mega Brands, makers of construction building sets and arts and craft products, for $460 million.

Mega Brands shareholders will receive 17 Canadian dollars and 75 cents ($15.96) per share, according to a statement issued by Mattel, which is headquartered in El Segundo. The company says the purchase price, which Mattel plans to fund through a combination of new debt and cash on hand, covers Mega’s debt.

The announcement comes nearly a month after Mattel reported a disappointing holiday season, saying in January that sales of key brands like Barbie and Fisher-Price preschool items dropped in its fourth quarter.

Mega Brands is the No. 2 player in the $4 billion construction building sets sector with its Mega Bloks brand and a competitor in the $2 billion arts and crafts sector, according to Mattel. Mega’s licensed brands also include Hello Kitty, Call of Duty and SpongeBob SquarePants.

Mega Brands estimated its sales for fiscal 2013 at $405 million. The Canadian company’s board unanimously approved the acquisition.

(©2014 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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