The company's shares, which have fallen about 90 per cent in the past 11 months on disappointing results and the lingering effects of a costly toy recall, were up 45.5 per cent at 56 Canadian cents on the Toronto Stock Exchange.
The multi-year, global agreement, gives it the rights to develop all-new construction toy sets based on the characters of Thomas & Friends books and TV.
Mega Brands Vice-President of Marketing Harold Chizick said "the impact to the business will be millions of dollars".
"It is a global deal and it's the number one pre-school property. The Thomas franchise sells billions of dollars in product around the world."