Vive La GameStop! For Assuming France’s Micromania At $700 Million
The retailer is catching Micromania in France, imparting another 332 store locations to its already vast worldwide presence.
GameStop announced in October 1,2008 that it’s come across a deal with
Micromania, France’s topping video game retailer with 332 locations, to
acquire the company from private equity fund capital. The dealing most
likely to close in November, is valued at $700 million (480 million
Euros) in cash (including the assumption of debt) and stays subject to
clearance by the European Commission.
GameStop will buy virtually all of the major shares of the company. The world’s biggest
retailer said it projects to fund the transaction through cash on hand,
a draw on its curent revolving credit facility, and a $150 million
trusted term loan from Bank of America.
Though GameStop has a large worldwide presence with 5,889 locations, the retailer had no shops in France.
Nevertheless, with the addition of Micromania, the company’s European store count will total 1.077.
The transaction is an expression of a belief that the European video game
market is developing and will be a crucial part of GameStop’s worldwide
emergence. Historically, most fruitful use of capital has, by far,
been the accession of new stores whether opened organically or
acquired. With the addition of Micromania, deployment of capital will
assist to attain EPS growth of 25% or more in fiscal 2009, and set
GameStop up for continued growth in the years to come.