-By T.L. Stanley

Cute and cuddly iconic properties, Strawberry Shortcake and Care Bears, have been sold for $195 million to a privately held Canadian entertainment and publishing company that's on a mission to be a player in the kid business. The seller, American Greetings, will retain licensing rights for 10 years in some of the most lucrative categories like greeting cards, party goods and calendars.

The announcement today comes about a month after American Greetings, Cleveland, filed—and was granted—a temporary restraining order to block the sale of its licensing partner, Burbank, Calif.-based DIC Entertainment, to Cookie Jar. With the sale of Strawberry Shortcake, Care Bears and a boy-targeted property called Sushi Pack, American Greetings has dropped its court fight, allowing Cookie Jar to proceed with the DIC purchase.

Cookie Jar today confirmed that it's acquiring DIC, with its library of some 6,000 half-hour animated programs that includes Sonic the Hedgehog, Horseland and Inspector Gadget. DIC's major revenue source has been its TV shows starring Strawberry Shortcake, as well as licensing and entertainment from a mix of other brands like Eloise, Mommy and Me and McDonald's.

DIC will become a division of Cookie Jar and will continue to be based in Southern California. The transaction is valued at about $88 million.

"When Cookie Jar was founded, we wanted to become an international power in children's entertainment programming," said CEO Michael Hirsh. By buying DIC and American Greetings' properties, CJ becomes "the fastest-growing independent player in the industry," he said.

Those join such properties as Caillou, Arthur, Johnny Test and The Doodlebops.

The move reunites Hirsh and Andy Heyward, DIC's chairman and CEO, who worked together on the original Inspector Gadget television series.

Heyward said recently that the current environment, dominated by Disney, Viacom and Warner Bros., isn't friendly to a small independent company like his. The merger is intended to strengthen both partners with complementary skills and expertise.

American Greetings, home to Holly Hobbie, Twisted Whiskers, Madballs and Maryoku Yummy, had reintroduced the '80s properties Strawberry Shortcake and Care Bears about six years ago. Since then, they'd pulled in a whopping $5 billion combined in retail sales of licensed products.

"This is a great outcome for our company and shareholders that has allowed us to realize significant value from all of our past efforts in these properties," said Josef Mandelbaum, CEO of the Intellectual Property Group at American Greetings.

The company will continue focusing on developing new properties. At one point, it had considered buying DIC, but dismissed the deal as not the right fit.