Model and collectibles group Hornby has snapped up German model railway accessories distributor Heico Modell.
Hornby is hoping to steam ahead in the German market
The deal means Hornby is taking on Heico's liabilities of 200,000 euros (£134,589; $256,235), as well as paying a nominal sum for the firm.
Hornby said the German group, which has more than 1,200 active customers, would help expand its reach in Europe.
Hornby also operates in France, Spain and Italy, allowing it to overcome a tough trading environment in the UK.
In June the group attributed an 8% rise in annual profits to £8.2m - albeit on turnover falling 2% to £44.1m - to its overseas expansion.
"The acquisition of Heico is a really important step in the development of our strategy to expand in Germany," said chief executive Frank Martin.
"The model railway market in Germany is the biggest in Europe and is estimated to be six times larger than the UK market."
Heico will be renamed Hornby Deutschland, the group added. Hornby already operates under the Lima, Arnold and Rivarossi brands in Germany.
Meanwhile, speculation was growing that Hornby - most famous for its model trains and Scalextric racing-cars - might be putting together a rescue package for the troubled model-making company Airfix.
On Thursday, the model firm's parent company, Humbrol, called in the administrators, while Hull-based Airfix axed 31 of its 41 staff.
Hornby's chief, Mr Martin, used to work at Airfix's parent company Humbrol, which bought the company in 1949 and manufacture the paints used by model collectors.
A deal would bring together two of the best-loved toy brands in Britain.