MARGATE model manufacturer Hornby has bought the business and assets of Spanish model railways company Electrotren for £5.3 million.

Hornby say the acquisition, paid for from cash reserves, will strengthen its position in key European markets for model railways and slot car racing products.

It is part of the company's forward-planning strategy to enlarge its stable of market leading hobby brands in the UK, Europe and America.

Electrotren was founded in 1951 and, until its acquisition by Hornby, has remained under the ownership of the founding Gonzalez family.

Following the sale, Pablo and Almudena Gonzalez, the son and daughter of the founder, will continue to be responsible for the day-to-day management of Electrotren.

Frank Martin, Hornby's chief executive, said the purchase Electrotren "will provide a platform to increase our sales of slot racing products in Spain, spearheaded by our recently launched MotoGP range."

He added: "In addition, the market-leading position of Electrotren in the Spanish model railway market will provide a significant platform for sales growth arising from the recently completed move of production to China.

"In many ways Electrotren is in the same position as Hornby was three years ago - the difficult decisions have been implemented, whilst the full benefits have yet to be realised.

“We are also delighted to welcome Pablo and Almudena Gonzalez to the Hornby team. They will continue to run Electrotren as managing director and operations director respectively.

“Over the past three years we have formed an excellent business relationship with them and we have every confidence that they will continue to improve the performance of Electrotren over the coming years.

“Their knowledge of the Spanish market and the wider European market will also be of great help to us as we develop our model railway business outside the UK."

Mr Martin also confirmed that the proposed purchase of certain assets of the Italian model makers Lima, is "also proceeding to plan."

He said: "Lima, when coupled with Hornby and Electrotren, will enhance further our continental European presence.

"Whilst we expect Lima to take some months before contributing positively to earnings post acquisition, we expect Electrotren to contribute positively from the outset.”