One of the most popular online retailers for all things geek, ThinkGeek (Geeknet, Inc.), has recently been purchased by Gamestop Corp. for $20 a share, givingย the deal an โequity value of approximately $140 million, including $37 million of cash and cash equivalents as of March 31, 2015.โ. ThinkGeek initially had a $122 million deal with retailer Hot Topic,ย with $17.50 per share and $37 million in cash, and that the acquisition would close by June 19, but terminated it in response to Gamestop’s offer.
Geeknet first mentioned the Gamestop’sย offer on aย recent press releaseย from May 29th., where the Geeknet board determined that the bidย was a good enough deal that it qualified under the terms of the Hot Topic merger agreement as a legitimately superior proposal.ย Hot Topic had until 9:00am EDT on June 1 to meet or exceed the new proposal.
“GameStop Corp. (NYSE: GME), a family of specialty retail brands that makes the most popular technologies affordable and simple, and Geeknet, Inc. (Nasdaq: GKNT) (โGeeknetโ), the parent company of ThinkGeek and ThinkGeek Solutions, today announced they have entered into a definitive agreement under which GameStop will acquire all of the outstanding shares of Geeknetโs common stock for $20.00 per share in cash. The transaction has been approved by the board of directors of both companies and will be completed by means of a tender offer. The transaction has a total equity value of approximately $140 million, including $37 million of cash and cash equivalents as of March 31, 2015.”
GameStop CEO Paul Raines offered his own statement on the acquisition, explaining, “This acquisition creates value to all stakeholders involved,” he said. “The addition of Geeknet is an important expansion of our global multichannel platform and we are excited to leverage their product development expertise to broaden our product offering in the fast-growing collectibles category and deepen relationships with our existing customer base.”
Geeknet’s CEO Kathryn McCarthy said, “As a part of GameStop’s family of brands, Geeknet will be well-positioned to achieve our goals of increasing our brand awareness and expanding our product offerings.”
Gamestopย expects to see an increase of about $100 million-plus in annual net sales as a result of the buyout. The deal should be concluded by the end of GameStopโs second financial quarter of 2015, in August.
It will be interestingย to see the response toย Gamestop’s acquisition since many on twitter were unhappy with Hot Topics deal. Nevertheless, Gamestop already sells a lot of game-themed merchandise, so adding ThinkGeek merchandise seems like a no brainer for the company.
What do you think of the acquisition? Are you a fan of ThinkGeek, and do you think this is a smart move by Gamestop? Let us know in the comments below!
