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Thunderbirds aren't go: British toy-maker's urgent hunt for buyer

The British toy company which has licences to make Thunderbirds and Moshi Monsters products is engaged in an urgent hunt for new owners following a slump in profits.

Sky News has learnt that Vivid, which is backed by the investment firm Phoenix Equity Partners, has asked KPMG's accelerated mergers team to identify new investors following an earlier sale process which failed to produce a buyer.

The development comes weeks after a privacy storm erupted in Germany over a talking doll called Cayla which is distributed by Vivid.

The toy's smart technology can reveal personal data to hackers, prompting warnings by an official watchdog over its use by children.

KPMG's search for a new owner for Vivid is said to be at an early stage, with discussions about a sale only recently underway with prospective buyers.

One person close to the auction said the company's profitability had fallen sharply after a big bet placed on the latest range of Thunderbirds toys turned sour.

A company source insisted that Thunderbirds had had "a successful launch year in 2015 and continues to be an important brand in the Vivid portfolio".

Vivid is Britain's biggest toy company and , according to its website, is the 20th-largest in the world.

It was set up in 1993, since when it has made action figures from films and television programmes such as Toy Story, Spiderman and Star Trek, as well as products aimed at pre-school children themed on Winnie the Pooh and Rosie & Jim.

Surrey-based Vivid sells to 60 countries around the world.

An insider said suggestions that Vivid may go through an insolvency process known as a pre-pack administration were groundless and that Phoenix remained confident that it would find a buyer.

"This is a profitable business with annual revenue of approximately £83m and positive EBITDA [earnings before interest, tax, depreciation and amortisation," they added.

Phoenix, which has owned a stake in Vivid since 2002, declined to comment.

The private equity firm's fund originated in 2001 is now approaching the end of its life, which is among the reasons it is now seeking a replacement shareholder, a source said.