GameStop to sell Spring Mobile Division for $700 million

GameStop

Grapevine-based GameStop Corp. (NYSE: GME) announced Nov. 21 that it has entered into a definitive agreement to sell its Spring Mobile business, which owns and operates 1,289 AT&T wireless stores.

The sale is 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, GameStop said in a news release.

The company had previously announced that its 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.

GameStop’s board determined that the sale of Spring Mobile is in the best interest of the company and its shareholders.

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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, the news release said.

Proceeds from the sale also 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,” Dan DeMatteo, executive chairman of GameStop’s board of directors, said in the release.

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.

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GameStop Corp., a Fortune 500 company, is a global, multichannel video game, consumer electronics and wireless services retailer operating more than 7,100 stores in 14 countries.

Its Technology Brands segment includes more than 1,300 Spring Mobile AT&T and Simply Mac stores.

Spring Mobile sells all of AT&T’s products and services, including DIRECTV, devices and related accessories in select markets in the U.S. Simply Mac sells the full line of Apple products, including laptops, tablets and smartphones and offers Apple certified warranty and repair services.

GameStop’s Annual Report on Form 10-K for the fiscal year ended Feb. 3, 2018:

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http://www.sec.gov or http://investor.GameStop.com

www.gamestop.com

– FWBP Staff