U.S.-based retailer GameStop has acquired French chain Micromania - the biggest specialty games retailer in the country.
Founded in 1993, Micromania currently operates 332 stores in France and enjoys annual revenues in excess of €500 million ($704m). GameStop currently has no stores in the country, although it is represented in most of the rest of mainland Europe.
The acquisition, from private equity fund L Capital, is valued at approximately $700 million in cash, including the assumption of all debts. GameStop will purchase almost all outstanding shares of the company, funding the transaction via its own cash reserves, revolving credit facility and a $150 million committed term loan from Bank of America.
The takeover will have to be cleared by the European Commission, which will investigate any monopoly concerns, and is expected to close in November of this year. Current Micromania president directeur general Pierre Cuilleret is expected to remain in his position at the head of the company.
"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," says GameStop executive chairman R. Richard Fontaine.
"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," says GameStop CEO Daniel A. DeMatteo.