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.
About GameStop Corp.
Headquartered in Grapevine, TX, GameStop Corp. is the world´s largest
video game and entertainment software retailer. The company operates
5,557 retail stores in 16 countries worldwide. The company also operates
two e-commerce sites, GameStop.com and EBgames.com, and publishes Game
Informer(R) magazine, a leading multi-platform video game publication.
GameStop Corp. sells new and used video game software, hardware and
accessories for video game systems from Sony, Nintendo, and Microsoft.
In addition, the company sells PC entertainment software, related
accessories and other merchandise.
General information on GameStop Corp. can be obtained at the company´s
corporate website: http://www.gamestopcorp.com.
About Micromania
Founded in 1983, Micromania is the leading video game retailer in France
with 332 stores. Since the end of August 2005, when Pierre Cuilleret
(founder of The Phone House) became President of Micromania, the company
has strengthened its position as a leader, opening more than 130 stores
in 3 years. Micromania team members share a successful, growth focused
culture, founded on a passion for video games, offering personalized
advice and customer service. With annual revenues on a current run-rate
exceeding €500 million, Micromania continues
to build on its strong brand reputation. With its Megacarte loyalty
program, and with initiatives such as the launch of its Pink Megacarte,
hosting of in-store discovery events for senior people, Micromania has
contributed to opening the video games market to a wider audience.
About L Capital
L Capital is a private equity fund sponsored by the luxury group LVMH.
It has about € 600 million under management,
and is focused on aspirational brands with high development potential
and selective distribution. L Capital had acquired a minority stake in
Micromania in 2001 before taking the control of the company in 2005.
Since then, Micromania has grown significantly from 81 to 332 stores and
from € 83 to over €
500 millions in sales, to become today the first video games retailer in
France. L Capital has 3 offices in Paris, Milan and Madrid and makes
investments throughout Europe. Since 2001, L Capital has made 20
investments including Antichi Pelletieri, Gant, EMU, Stroili Oro, La
Gardenia, Micromania, Forte Pharma, Imaginarium, Nutrition & Santé,
Calligaris, Groupe Bertrand, Piazza Sempione, Princess Yachts, etc.
For additional information, contact Philippe Franchet at +33 1 44 13 42
34 or by cell at +33 6 86 37 08 58.
Safe Harbor
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
statements may include, but are not limited to, the proposed acquisition
of Micromania, future financial and operating results, projected store
openings, the company’s plans, objectives,
expectations and intentions and other statements that are not historical
facts. Such statements are based upon the current beliefs and
expectations of GameStop’s management and are
subject to significant risks and uncertainties. Actual results may
differ from those set forth in the forward-looking statements. The
following factors, among others, could cause actual results to differ
from those set forth in the forward-looking statements: the failure to
close the Micromania acquisition, as a result of the inability to
satisfy the closing conditions or otherwise; the inability to integrate
Micromania’s management and operations into
those of the company on a timely and successful basis; the inability to
obtain sufficient quantities of product to meet consumer demand,
including Nintendo’s Wii; the timing of
release of video game titles for next generation consoles; the risks
associated with expanded international operations; and economic and
other events that could reduce or impact consumer demand. Additional
factors that could cause GameStop’s results
to differ materially from those described in the forward-looking
statements can be found in GameStop’s Annual
Report on Form 10-K for the fiscal year ended February 2, 2008 filed
with the SEC and available at the SEC’s
Internet site at http://www.sec.gov/
or http://investor.gamestop.com.
L Capital
France :
L Capital
Philippe Franchet
+
33 1 44 13 42 34
or
DGM Conseil
Michel Calzaroni /Olivier
Labesse / Sonia Fellmann
+ 33 1 40 70 11 89
or
UK :
M:
Communications
Hugh Morrison
+ 44 207 153 15 34
or
Italy
:
Community Group
Financial and Corporate Press
Auro
Palomba / Roberto Patriarca
+39 02 89 40 42 31
or
US :
Kekst
& Company
James Fingeroth / Victoria Weld / Molly Morse
212-521-4800
or
GameStop
Corp.
Media:
Chris
Olivera, 817-424-2130
Vice President,
Corporate Communications
or
Investor:
Matt
Hodges, 817-424-2130
Director
Investor Relations