GameStop to Sell Spring Mobile Division for $700 Million
November 21 2018 - 12:48PM
GameStop Corp. (NYSE: GME) today announced that it
has entered into a definitive agreement to sell its Spring Mobile
business, which owns and operates 1,289 AT&T wireless stores,
to Prime Communications, L.P. for $700 million, excluding
transaction fees and subject to customary working capital and
indebtedness adjustments. The transaction is expected to
close in the fourth quarter of fiscal 2018, subject to customary
regulatory approvals and closing conditions.
As previously announced, GameStop’s board of
directors, together with outside financial advisors, is undertaking
a comprehensive review of a wide range of strategic and financial
alternatives to enhance shareholder value. In connection with its
review, GameStop’s board determined that the sale of Spring Mobile
is in the best interest of the company and its shareholders, as the
transaction generates immediate cash proceeds and enables the
company to increase its focus on serving its customers’
entertainment needs across video games and collectibles.
Proceeds from the sale may be used to reduce the
company’s outstanding debt, fund share repurchases, reinvest in
core video game and collectibles businesses to drive growth, or
some combination of these options.
“This transaction enables GameStop to enhance
our performance with an increased focus on the video game industry
and the rapidly-growing collectibles space. These are areas
where we have considerable experience and where we are well
positioned to capitalize on our competitive position,” said Dan
DeMatteo, executive chairman of GameStop’s board of
directors. “Our board continues to review strategic and
financial alternatives to enhance shareholder value and we look
forward to providing an update on the process at the appropriate
time.”
Perella Weinberg Partners LP is acting as
financial advisor and Pepper Hamilton LLP is acting as legal
counsel to GameStop in relation to the sale of Spring Mobile.
J.P. Morgan Securities LLC and SunTrust Robinson Humphrey, Inc. are
acting as financial advisors and Gibson, Dunn & Crutcher LLP is
acting as legal counsel to Prime Communications.
About GameStopGameStop Corp., a Fortune 500
company headquartered in Grapevine, Texas, is a global,
multichannel video game, consumer electronics and wireless services
retailer. GameStop operates over 7,100 stores across 14 countries.
The company's consumer product network also includes
www.gamestop.com; Game Informer® magazine, the world's leading
print and digital video game publication; and ThinkGeek,
www.thinkgeek.com, the premier retailer for the global geek
community featuring exclusive and unique video game and pop culture
products. Our Technology Brands segment includes over 1,300 Spring
Mobile AT&T and Simply Mac stores. Spring Mobile,
www.springmobile.com, sells all of AT&T’s products and
services, including DIRECTV, devices and related accessories in
select markets in the U.S. Simply Mac, www.simplymac.com, sells the
full line of Apple products, including laptops, tablets, and
smartphones and offers Apple certified warranty and repair
services.
General information about GameStop Corp. can be
obtained at the company’s corporate website. Follow @GameStop and
@GameStopCorp on Twitter and find GameStop on Facebook
at www.facebook.com/GameStop.
Safe HarborThis press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are based
upon management’s current beliefs, views, estimates and
expectations, including as to the Company’s industry, business
strategy, goals and expectations concerning its market position,
future operations, margins, profitability, capital expenditures,
liquidity and capital resources and other financial and operating
information. Such statements include without limitation those about
the Company’s outlook for fiscal 2018, future financial and
operating results, projections, expectations and other statements
that are not historical facts. All statements regarding the board’s
review of operating, strategic, financial and structural
alternatives and expected costs and benefits, including whether
operating, strategic, financial and structural alternatives could
unlock value, are forward-looking statements. Forward-looking
statements are subject to significant risks and uncertainties and
actual developments, business decisions and results may differ
materially from those reflected or described in the forward-looking
statements. There can be no assurance that the transaction will be
completed on the terms described in this press release or at all,
and there can be no assurance that we will realize the expected
benefits from the transaction if it is completed. The
following factors, among others, could cause actual results to
differ from those reflected or described in the forward-looking
statements: the uncertain outcome, impact, effects and results of
the board’s review of operating, strategic, financial and
structural alternatives; volatility in capital and credit markets,
including changes that reduce availability, and increase costs, of
capital and credit; our inability to obtain sufficient quantities
of product to meet consumer demand; the timing of release and
consumer demand for new and pre-owned products; our ability to
continue to expand, and successfully open and operate new stores
for our collectibles business; risks associated with achievement of
anticipated financial and operating results from acquisitions; our
ability to sustain and grow our console digital video game sales;
the impact of goodwill and intangible asset impairments; cost
reduction initiatives, including store closing costs; risks related
to changes in, and our continued retention of, executive officers
and other key personnel; changes in consumer preferences and
economic conditions; increased operating costs, including wages;
cyber security events and related costs; risks associated with
international operations; changes to our wireless industry
partnerships and operations; increased competition and changing
technology in the video game industry; changes in domestic or
foreign laws and regulations that reduce consumer demand for, or
increase prices of, our products or otherwise adversely affect our
business; our effective tax rate and the factors affecting our
effective tax rate, including changes in international, federal or
state tax, trade and other laws and regulations; the costs and
outcomes of legal proceedings and tax audits; and unexpected
changes in the assumptions underlying our outlook for fiscal 2018.
Additional factors that could cause our results to differ
materially from those reflected or described in the forward-looking
statements can be found in GameStop's Annual Report on Form 10-K
for the fiscal year ended February 3, 2018 filed with the SEC and
available at the SEC's Internet site at http://www.sec.gov or
http://investor.GameStop.com. Forward-looking statements contained
in this press release speak only as of the date of this release.
The Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by any
applicable securities laws.
Contact
GameStop Corp. Investor Relations
(817) 424-2001
investorrelations@gamestop.com
publicrelations@gamestop.com
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