GameStop buys French video game chain
By Staff -- Gifts and Dec, 10/2/2008 10:04:00 AM
GRAPEVINE, Texas—Video game retailer GameStop is acquiring Micromania, France’s leading video game retailer, from private equity fund L Capital for approximately $700 million in cash.
Once completed, the addition of the French chain’s 332 locations will balloon GameStop’s worldwide store tally to 5,889 locations—1,077 of them in Europe. Besides France, the retailer’s European operations include Italy, Germany, Austria, Switzerland, Sweden, Norway, Denmark, Finland, Ireland, Spain and Portugal. GameStop also has stores in Canada, Australia and New Zealand.
According to GameStop CEO Daniel A. DeMatteo, the purchase “reflect[s] our belief that the European video game market is growing and will be an important part of GameStop’s worldwide growth.”
DeMatteo expects the purchase to help GameStop achieve earnings-per-share growth of at least 25 percent in fiscal 2009. “We expect this acquisition to be accretive to our fully diluted EPS in both the fourth quarter of fiscal 2008 and fiscal 2009,” he said.
The transaction, which includes the assumption of debt, is subject to clearance by the European Commission, and is expected to close in November. Under the terms of the deal, GameStop will purchase virtually all of the outstanding shares of the Micromania. GameStop intends to fund the transaction through cash on hand, a draw on its existing revolving credit facility, and a $150 million committed term loan from Bank of America.
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