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Hornby has bought model-maker Corgi for £7.5 million and plans to expand the brand.

The model railway maker is paying £7.5 million for the rights to Corgi brands plus another £800,000 for its current stock inventory.

Kent-based Hornby said it will focus on managing the brand for growth, retaining key existing marketing, sales and development personnel, while currently outsourced logistics will be integrated into Hornby along with sales administration, finance and operations.

The deal will be funded from Hornby's banking facilities, the firm said.

In the year to March 31st 2008, Corgi generated sales of £6.5 million, and the acquisition is expected to be earnings neutral in the current financial year, Hornby said.

As part of the acquisition, Hornby is also acquiring Bassett-Lowke, an 'O' gauge model railway brand.

Hornby chief executive Frank Martin said: "We intend to build on the brand's super heritage and invest to build its premier position in the market. The strategic fit with our existing businesses could not be better. We are confident that we will grow the scale of the business rapidly and drive it forward."

The company will focus on product innovation, improving the distribution network and driving sales growth both in the UK and internationally, Hornby said.

Corgi is one of the oldest manufacturers of collectible die-cast models of trucks, buses, cars and aeroplanes in the world, while Hornby is famous for its model railways.