Tyco Toys
Tyco Toys was an American toy manufacturer that evolved from a model-train maker into a diversified mass-market toy company before being acquired by Mattel in 1997.
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Overview
Tyco Toys was an American toy manufacturer whose history began with Mantua Metal Products, a New Jersey business established in 1926 by John Tyler and Jim Thomas. The original company made model boats and electric motors, later moving into model-railroad equipment and ready-to-run HO-scale trains. The Tyco name became associated with the company's more accessible, consumer-oriented train products in the 1950s, and the business entered the broader toy market through smaller trains, slot-car sets, accessories, and products sold through general retailers as well as hobby shops. The company changed substantially after Mantua and Tyler Manufacturing were combined as Tyco Industries in 1967. Consolidated Foods acquired the business in 1970, moved much of its manufacturing to Hong Kong, and shifted the company toward mass-market toys. The decline of traditional model trains and the growing popularity of electronic toys forced Tyco to diversify. Its 1980s portfolio included US-1 Trucking electric vehicles, radio-controlled cars, Super Blocks construction toys, Super Dough modeling compound, action figures, musical toys, and other novelty products. Its radio-control business expanded rapidly after a partnership with Japanese manufacturer Taiyo, producing vehicles such as the Turbo Hopper. Tyco became publicly traded in 1986. During the same period, it pursued acquisitions and licensing agreements to broaden its reach. The 1989 purchase of the View-Master Ideal Group added View-Master stereoscopes, Magna Doodle magnetic drawing products, and Ideal dolls. Tyco also developed licensed and character-based products connected with properties such as Sesame Street, Disney's The Little Mermaid, Looney Tunes, and Dino-Riders. The purchase of Playtime Toys and the acquisition of Matchbox in 1992 further expanded its distribution capabilities and international presence. The company experienced governance problems during the tenure of chairman Benson Seltzer. Shareholders challenged transactions involving businesses connected with Seltzer and his family, and Seltzer and his sons eventually exited the company in 1991. Richard Grey became chairman while continuing as president and chief executive. Later, Gary Baughman led a restructuring that reduced Tyco's dependence on licensed entertainment properties and attempted to restore emphasis on established toy categories. Despite these efforts, Tyco recorded cumulative losses in the mid-1990s and remained smaller than Mattel and Hasbro. Tyco's strongest late-period success was Tickle Me Elmo, a Sesame Street plush toy released in 1996. Demand greatly exceeded the company's initial expectations, making the product one of the defining holiday toys of that year and requiring accelerated production in China. The success did not reverse Tyco's broader financial difficulties. Mattel announced an agreement to acquire the company in November 1996, and the transaction was approved in March 1997 for approximately $755 million. Tyco's product lines were subsequently absorbed into Mattel divisions: Sesame Street, Magna Doodle, and View-Master moved primarily into Fisher-Price, while Matchbox, Tyco Electric Racing, and Tyco Radio Control were placed with Mattel's Wheels activities. Tyco's Mount Laurel offices closed in 2005, completing the operational absorption of the former company. The Tyco name has also appeared in later trademark and collector activity, but the original Tyco Toys operating company is no longer independent.
History
Tyco Toys originated in 1926 as Mantua Metal Products, founded by John Tyler and Jim Thomas in Mantua, New Jersey. The company initially produced model boats and electric motors before concentrating on motors and equipment for model railroads. It moved to Woodbury Heights in 1933 and began selling its own ready-to-run HO-scale model train in 1937. During the Second World War, from 1942 through 1945, the plant shifted to precision measuring and mapping equipment for the U.S. Army and Navy. The company received the Army-Navy E Award in 1945 and returned to railroad production after the war. Tyler Manufacturing was formed in 1953 to develop smaller, ready-to-run trains for younger consumers. These products could be sold through mass retailers as well as hobby shops, allowing the company to reach customers beyond traditional model-railroad enthusiasts. The Tyco name became an official nameplate for ready-to-run trains in 1957, and the company entered the electric slot-car market in 1963. Mantua and Tyler Manufacturing were merged in 1967 as Tyco Industries, with Norman Tyler, John Tyler's son, becoming president. Consolidated Foods acquired Tyco in 1970. Manufacturing moved largely to Hong Kong, the company relocated to Mount Laurel, New Jersey, and the Mantua name was phased out of the principal business by 1972. The decline of model trains during the 1970s, combined with competition from electronic toys, weakened Tyco's traditional business. The company responded by diversifying into consumer toys. In 1977, Norman Tyler separated the original Mantua factory and business from Tyco, preserving a distinct model-railroad operation. In 1981, Consolidated Foods sold Tyco to Savoy Industries, an investment group led by Benson Seltzer. Tyco introduced US-1 Trucking as an attempt to replace some of the excitement once generated by trains, and the line initially performed strongly. The company also entered construction toys with Super Blocks in 1984 and later developed a major radio-control business. Lego sued over Super Blocks, but Tyco prevailed in 1987, although restrictions were placed on the product's marketing and production. A partnership with Taiyo helped Tyco produce more powerful radio-controlled vehicles, including the Turbo Hopper. Tyco's public-company period brought both expansion and controversy. It went public in February 1986 and broadened its range through acquisitions, licensing, and product development. The company launched Super Dough, Dino-Riders, electronic musical toys, and pocket-sized products distributed with Sega Toys. Its 1989 acquisition of the View-Master Ideal Group added View-Master, Magna Doodle, and Ideal dolls. The company also expanded internationally through subsidiaries and acquired Playtime Toys in 1990. Governance problems emerged under Benson Seltzer, who controlled the board through family members and allies. Shareholders sued over transactions involving companies connected to Seltzer and his family, including the use of Tyco funds to purchase a Puerto Rican underwear business in which the family had an interest. Seltzer and his sons left the company and sold their remaining shares in 1991. Richard Grey subsequently became chairman while retaining senior executive responsibilities. Tyco pursued further expansion in 1992 by acquiring Matchbox and Illco Toy Company. Illco's Sesame Street products became the basis for Tyco Preschool, and the company signed a long-term licensing agreement with Children's Television Workshop. Tyco also developed products associated with Disney, Warner Bros., and other entertainment properties. It exited the model-train business after 1993 and brought in Gary Baughman as president in 1994 to restructure the company. The strategy shifted toward classic toy categories and away from excessive reliance on film and television tie-ins, while international operations were consolidated in Belgium. The company nevertheless remained financially weak, reporting three consecutive years of losses totaling $135.5 million by 1996. Its most important late success was Tickle Me Elmo, released in July 1996 through the Sesame Street business. Tyco initially expected to sell about 400,000 units, but demand surged during the holiday season and required four Chinese factories to increase output. The product became one of the period's best-known toy crazes. Mattel announced its acquisition of Tyco in November 1996. The Federal Trade Commission approved the approximately $755 million transaction in March 1997. Integration included substantial workforce reductions and the redistribution of Tyco products among Mattel divisions. Fisher-Price took responsibility for Sesame Street, Magna Doodle, and View-Master products, while Matchbox, Tyco Electric Racing, and Tyco Radio Control were associated with Mattel's Wheels division. Tyco's Mount Laurel offices closed in 2005. The separate Mantua model-railroad business continued until 2001, when Model Power acquired it; later Mantua trademark rights passed through licensing and acquisition arrangements unrelated to the former Tyco Toys company.
- 2005
Mount Laurel offices close
[1]Tyco operations are transferred to Mattel's El Segundo headquarters.
- 1997
Mattel completes the acquisition
[1]Regulatory approval allows Mattel to absorb Tyco and reorganize its product lines under existing Mattel divisions.
- 1996
Tickle Me Elmo becomes a major hit
[1]The Sesame Street plush toy becomes a leading holiday product and drives an emergency production increase.
- 1993
Tyco exits model trains
[1]The company moves decisively away from its historic model-railroad category.
- 1992
Matchbox and Illco are acquired
[1]The acquisitions strengthen Tyco's vehicle, licensed preschool, and international businesses.
- 1989
View-Master Ideal Group is acquired
[1]Tyco adds View-Master, Magna Doodle, and Ideal Nursery products to its portfolio.
- 1986
Tyco becomes publicly traded
[1]The company enters the public markets and begins a period of aggressive product and acquisition expansion.
- 1981
Savoy Industries purchases Tyco
[1]Consolidated Foods sells Tyco to Savoy Industries, led by Benson Seltzer.
- 1970
Consolidated Foods acquires Tyco
[1]Ownership changes and manufacturing shifts toward Hong Kong as Tyco moves toward mass-market toys.
- 1967
Tyco Industries is formed
[1]Mantua and Tyler Manufacturing merge, creating Tyco Industries under Norman Tyler's leadership.
Products and positioning
Tyco positioned itself as an innovative, mass-market toy company offering accessible alternatives to established hobby and toy brands. It moved from model railroading into radio-controlled vehicles, construction toys, licensed preschool products, action figures, and electronic novelties, often emphasizing play value, visual spectacle, and broad retail distribution.
Model railroading · 1937
Tyco Model Trains
Tyco's original core business consisted of ready-to-run HO-scale trains, locomotives, rolling stock, track, controllers, repair parts, and accessories. The company helped make model railroading more accessible by offering smaller, packaged sets through toy stores and discount retailers as well as hobby shops. The train business remained central through the early 1980s but was gradually displaced by newer toy categories and was exited after 1993.
Slot-car racing · 1963
Tyco Electric Racing
Tyco's electric racing products used powered miniature cars, tracks, controllers, and themed accessories to create home racing sets. Introduced in the 1960s, the line extended the company's expertise in motors and model vehicles into a more directly competitive toy format. After Mattel's acquisition, Tyco Electric Racing was grouped with Mattel's Wheels activities.
Electric toy vehicles · 1981
US-1 Trucking
US-1 Trucking was a system of electric trucks and related vehicles introduced as Tyco sought to move beyond traditional model trains. The line offered road-based play using powered vehicles and accessories. It initially performed strongly, although consumer interest later weakened and Tyco redirected attention toward radio control and other newer toy categories.
Radio-controlled vehicles · 1986
Tyco R/C
Tyco rebuilt its radio-control business during the mid-1980s through cooperation with Japanese manufacturer Taiyo. The resulting vehicles emphasized powerful motors, suspension systems, rugged driving, and visually dramatic performance. Models such as the Turbo Hopper helped establish Tyco R/C as one of the company's most visible mass-market businesses, alongside later cars, trucks, and stunt-oriented products.
Construction toys · 1984
Super Blocks
Super Blocks was Tyco's interlocking construction-block system, introduced after the expiration of key Lego patent protection. Tyco promoted the product as compatible with Lego and Duplo-style bricks, which prompted Lego to sue. Tyco won the case in 1987, although restrictions were imposed on how the product could be marketed and produced. The line represented Tyco's attempt to enter a major construction-toy category rather than remain dependent on vehicles and trains.
Action figures · 1988
Dino-Riders
Dino-Riders combined dinosaur figures with armored riders and science-fiction storytelling. Tyco introduced the line in 1988 and supported it with an animated television series intended to build awareness and extend the play narrative. It exemplified the company's late-1980s use of entertainment-style storytelling and character licensing to compete in action figures.
Stereoscopic visual toys · 1989
View-Master
View-Master stereoscopes became part of Tyco's portfolio through the 1989 acquisition of the View-Master Ideal Group. The products used image reels and a handheld viewer to create a three-dimensional visual experience. Following Mattel's acquisition of Tyco, the line was managed with other Fisher-Price-associated products.
Drawing toys · 1989
Magna Doodle
Magna Doodle was a reusable magnetic drawing board acquired with the View-Master Ideal Group. Children could draw on the surface and erase it for repeated use, making the product a durable, low-consumable alternative to paper-based drawing. Mattel later placed Magna Doodle within its Fisher-Price-related portfolio.
Preschool and licensed toys · 1992
Tyco Preschool
Tyco Preschool grew from the acquisition of Illco Toy Company and its licensed Sesame Street products. The business used recognizable preschool characters across plush toys, dolls, and related play products. Its most famous release was Tickle Me Elmo, whose 1996 holiday success became Tyco's final major commercial breakthrough before the Mattel acquisition.
Licensed plush toy · 1996
Tickle Me Elmo
Tickle Me Elmo was a Sesame Street plush toy that reacted to repeated tickling with movement and laughter. Released in 1996, it rapidly became one of the season's most sought-after toys. Tyco had expected a much smaller sales volume and had to expand production at several Chinese factories. The product and its retail scarcity became a defining example of a 1990s holiday toy craze.
Electronic musical toys
Tyco Hot Lixx and Hot Keyz
Hot Lixx electronic guitars and Hot Keyz electronic keytars were part of Tyco's late-1980s and early-1990s musical-toy assortment. They extended Tyco's move into novelty electronics and performance-oriented play, complementing its radio-controlled vehicles, action figures, and other products aimed at children interested in popular culture and technology.
Die-cast vehicles · 1992
Matchbox
Tyco acquired Matchbox in 1992 for its established scale-model vehicle business and international reach. The acquisition gave Tyco a stronger presence in markets including the United Kingdom and Germany. After the Mattel transaction, Matchbox was placed alongside Hot Wheels in Mattel's Wheels organization.
Controversies
1988
Shareholder challenge over related-party transactions
During Benson Seltzer's control of Tyco, the company used corporate funds in transactions involving businesses connected with Seltzer and his family, including the purchase of a Puerto Rican underwear company. Shareholders filed suit, contributing to a broader governance crisis that ended with Seltzer and his sons leaving the company in 1991.
Marketing campaigns
- 1996Tickle Me Elmo holiday push
United States
Tyco launched its Sesame Street plush toy in July and supported it through the Christmas retail season. Unexpected demand turned the product into a high-profile holiday phenomenon.
Outcome. Tyco expanded production from an initial expectation of roughly 400,000 units to an emergency effort targeting approximately one million units before Christmas.
- 1988Dino-Riders animated marketing program
United States
Tyco supported Dino-Riders action figures with an animated television series, using serialized storytelling to promote the dinosaur-themed toy line and encourage character-based play.
Outcome. The program established Dino-Riders as a recognizable late-1980s action-figure property, although the line was later discontinued.
Brand decisions
1996
Launch and rapid scale-up of Tickle Me ElmoProduct launchBackground
Tyco's preschool business had a major Sesame Street licensing position, but the company was also experiencing several years of losses.
Action taken
Tyco released Tickle Me Elmo and expanded manufacturing after demand far exceeded its original forecast.
Aftermath
The toy became the leading holiday sensation of the season, but its success was followed quickly by Mattel's acquisition of Tyco.
1996
Agreement to sell Tyco to MattelM&ABackground
Tyco had a broad product portfolio and important licensed brands but had suffered cumulative losses and remained smaller than the two market leaders.
Action taken
Mattel agreed to acquire Tyco, combining Mattel's distribution capabilities with Tyco's products and brands.
Aftermath
The transaction was approved in 1997. Tyco products were allocated among Fisher-Price and Mattel's Wheels division, and the independent Tyco company disappeared.
Acquisition value. $755 million (1996-1997)
1994
Restructuring under Gary BaughmanStrategyBackground
Tyco had become a distant third behind Mattel and Hasbro and had accumulated substantial losses.
Action taken
The company appointed Gary Baughman as president, refocused on classic toy categories, reduced emphasis on film and television tie-ins, and raised capital to reduce debt.
Aftermath
The restructuring did not restore sustained independence; Tyco remained loss-making and was acquired by Mattel in 1997.
Stock offering. $96 million (1994)
1992
Acquisition-led international expansionM&ABackground
Tyco wanted broader international distribution and stronger vehicle and preschool portfolios.
Action taken
It acquired Matchbox and Illco Toy Company and expanded licensed products through the Tyco Preschool business.
Aftermath
Matchbox strengthened Tyco's vehicle presence in Europe, while Illco supplied a larger Sesame Street platform that later produced Tickle Me Elmo.
Matchbox acquisition price. $106 million (1992)
1986
Rebuild of the radio-control businessStrategyBackground
Tyco needed growth categories as the model-train market declined and electronic toys gained popularity.
Action taken
Tyco partnered with Japanese manufacturer Taiyo to introduce radio-controlled vehicles with stronger motors and more dynamic suspensions.
Aftermath
The line expanded rapidly, occupying a growing share of Tyco's catalogs and becoming a major company category.
1984
Tyco enters interlocking construction toysOtherBackground
Tyco sought to diversify beyond model trains and vehicle products as traditional train sales weakened.
Action taken
The company introduced Super Blocks and marketed them as compatible with Lego and Duplo-style systems.
Aftermath
Lego sued, but Tyco won in 1987; the court nevertheless imposed limits on Super Blocks marketing and production.
- Lego — Lego pursued litigation seeking to stop Tyco's construction-block product.
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