GameStop has increased their European presence to 1,077 stores after announcing the acquisition of France's leading video game retailer Micromania. The acquisition covers 332 stores in France, a country where GameStop previously had no presence whatsoever. Congratulations, France.
R. Richard Fontaine, GameStop’s Executive Chairman, said, “As we have accelerated our growth in Europe over the years, we have kept a close eye on the European retailers whose passion for the business is reflected in the quality of their stores and evident knowledge of their staff. Micromania has been that type of retailer.
There you go, European retailers. If you try really hard to be the best at what you do, maybe one day GameStop will absorb you into their fleshy folds as well!GameStop Acquires Micromania, France’s Leading Video Game Retailer from Private Equity Fund L Capital Transaction Includes 332 Locations Throughout France Increases GameStop’s European Presence to 1,077 Stores GRAPEVINE, Texas—(BUSINESS WIRE)—GameStop (NYSE: GME), the world’s largest video game retailer, today announced that it has reached a definitive agreement to acquire Micromania, France’s leading video game retailer with 332 locations throughout the country, from private equity fund L Capital, its controlling shareholder. GameStop, which currently has no stores in France, will operate 5,889 locations worldwide in the United States, Canada, Australia, New Zealand and, with the Micromania acquisition, the European store count will top 1,077 stores located throughout France, Italy, Germany, Austria, Switzerland, Sweden, Norway, Denmark, Finland, Ireland, Spain and Portugal. The transaction, for approximately US$700 million (€480 million) in cash, including the assumption of debt, is subject to clearance by the European Commission, and is expected to close in November of 2008. Under the terms of the agreement, GameStop will purchase virtually all of the outstanding shares of the company. 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. R. Richard Fontaine, GameStop’s Executive Chairman, said, “As we have accelerated our growth in Europe over the years, we have kept a close eye on the European retailers whose passion for the business is reflected in the quality of their stores and evident knowledge of their staff. Micromania has been that type of retailer. When the opportunity arose to purchase Micromania, and after meeting the executives who lead the company, we became convinced that expanding into Europe’s second largest video game market with Micromania’s management team and GameStop’s diverse experience was a great combination for profitable growth.” Daniel A. DeMatteo, GameStop’s Chief Executive Officer, indicated that, “The transaction is a reflection of our belief that the European video game market is growing and will be an important part of GameStop’s worldwide growth. Historically, our most productive use of capital has, by far, been the addition of new stores whether opened organically or acquired. With the addition of Micromania, we have begun deployment of capital that we believe will help us achieve EPS growth of 25% or more in fiscal 2009, and set GameStop up for continued growth in the years to come. We expect this acquisition to be accretive to our fully diluted EPS in both the fourth quarter of fiscal 2008 and fiscal 2009.” Pierre Cuilleret, who will remain Micromania’s President Directeur Général, said, “Micromania is a terrific brand. I am particularly pleased that the GameStop management team recognized the impassioned quality and importance of our sales advisors and senior managers. With GameStop as a partner, and with their history of seeking out new growth opportunities, I am very enthusiastic about our potential to expand the brand that has been built for over 25 years in France”. Philippe Franchet, Senior Partner of L Capital, said, “Our strategy, engaged in 2001, to build the leading video games retailer in France under the management of a top quality team has paid out. It is this strategic position and the quality of the management team, under the leadership of Pierre Cuilleret, that the world leader GameStop has acquired.” Citi acted as financial advisor to GameStop, and Lazard Frères acted as financial advisors to Micromania’s shareholders. Bryan Cave LLP served as legal advisor to GameStop and Ayache, Salama & Associés served as legal advisor to Micromania’s shareholders.