Press releases
The Electronics Boutique Plc acquires Scoregames in France
08/10/2001
- Acquisition of Scoregames, France's second largest leading specialist retailer of computer software and video games
- Scoregames has 37 stores, primarily in the Paris areaM
- Initial consideration of FFr 80 million (£7.6 million) with additional consideration dependent upon the future financial performance of Scoregames
- France is Europe's third largest market and has been a primary target market for Electronics Boutique in its international strategy
- Electronics Boutique now has 141 outlets outside the UK and Eire
- On 2 October, Electronics Boutique announced interim results for the six months ended 31 July 2001 showing like for like sales up 23 per cent for the period, and up 46 per cent for the nine weeks ended 29 September 2001
Peter Lewis, chairman of Electronics Boutique, stated:
"The acquisition of Scoregames is another significant step in our European strategy bringing our total number of branded, franchised and gaming outlets in Europe (outside the UK and Eire) to 141 compared with four just four months ago. France has been a primary target in Europe and we believe that our timing for entering this market presents a significant opportunity for sustained growth. Our recent interim results show that the games industry is performing strongly largely due to the extensive range of new console launches, and Scoregames is well positioned to capitalise on this. We look forward to working with Philippe Charot and his team in building a major specialist retailer of computer games software and hardware in France".
Enquiries:
Electronics Boutique, Tel: 01344 464 040
John Steinbrecher, Chief Executive
Martin Long, Deputy Chief Executive
Financial Dynamics, Tel: 0207 831 3113
Nic Bennett/Ben Foster/Charlie Armitstead
Dresdner Kleinwort Wasserstein, Tel: 020 7623 8000
Oliver Corbett, Director
Chris Baird
NOT FOR RELEASE OR DISTRIBUTION INTO THE UNITED STATES, CANADA, SOUTH AFRICA OR JAPAN
The Electronics Boutique Plc
("Electronics Boutique")
Acquisition of Scoregames
("Scoregames")
Electronics Boutique, the UK's leading specialist retailer of computer software and video games, today announces the acquisition of the French group Scoregames through the French Branch of its wholly owned subsidiary Games (Stores) Limited. The acquisition continues Electronics Boutique's strategy of expanding its operations into Europe at a time when the computer games industry is experiencing strong and sustained growth. France is Europe's third largest national market, after the UK and Germany, with estimated total sales in 2000 of £1 billion including console hardware (Source: IDG), and has been a primary market targeted by Electronics Boutique for its European expansion. Scoregames is France's second largest specialist retailer of computer software and video games. The initial consideration for the acquisition is FFr 80 million (£7.6 million) in cash with additional consideration (up to a maximum of FFr 120 million) which may become payable dependent upon the future financial performance of Scoregames.
Background Information on Scoregames
Scoregames was established in 1992 by its Directeur Generale, Philippe Charot. It operates 37 stores which are mainly situated in the Paris region with the flagship store near Gare St Lazare, Paris. The Group has shown a track record of profitability up to, and including, the year ended 30 June 2000, though recorded a loss in the year ended 30 June 2001. Following a restructuring of the group in 1999, in which minority shareholdings in around 30 of the stores were bought back, the company has since had access to limited working capital resources. In the year to 30 June 2001, Scoregames's audited accounts (under French GAAP) showed turnover of FFr 238 million (£22.5 million), operating profit before depreciation and amortisation of FFr 0.2 million (£19,000) and a loss before tax of FFr 5.1 million (£0.5 million). Its net assets as at 30 June 2001 were FFr 25 million (£2.4 million).
Electronics Boutique in Europe
Over the last five years, Electronics Boutique has established itself as the UK's leading retailer of computer games, with a market share of approximately 30 per cent (Source: ChartTrack). Electronics Boutique has over 300 stores and concessions in the UK, and recently announced results for the six month period ended 31 July 2001 showing turnover of £143 million, up 25 per cent on the same period in 2000. Like for like sales were up 23 per cent for the period and have continued to be strong, up 46 per cent during the 9 weeks to 29 September 2001. This reflects the exceptional growth being experienced in the computer games industry largely due to the next generation of consoles coming on to the market. These include the recent launches of Playstation 2 and Gameboy Advance.
During 2001, Electronics Boutique has pursued a strategy of selective acquisitions in Europe to capitalise upon its UK market share, and to take maximum advantage of the favourable market conditions which are expected to follow the launch of Playstation 2 and Gameboy Advance, as well as the forthcoming launches of Microsoft X Box and Nintendo GameCube, both due in Europe in Spring 2002. In June 2001, the company acquired CentroMAIL, Spain's leading specialist retailer of video games, as well as acquiring eight stores in Sweden to become the leading specialist retailer of video games in that territory. In July, the company raised £17.3 million, net of expenses, through a placing of shares to help finance further acquisitions. The initial consideration of Scoregames will be financed from the proceeds of this placing.
Peter Lewis, chairman of Electronics Boutique, stated:
"The acquisition of Scoregames is another significant step in our European strategy bringing our total number of branded, franchised and gaming outlets in Europe (outside the UK and Eire) to 141 compared with four just four months ago. France has been a primary target in Europe and we believe that our timing for entering this market presents a significant opportunity for sustained growth. Our recent interim results show that the games industry is performing strongly largely due to the extensive range of new console launches, and Scoregames is well positioned to capitalise on this. We look forward to working with Philippe Charot and his team in building a major specialist retailer of computer games software and hardware in France".
Additional information:
Electronics Boutique will pay an initial cash consideration for the share capital of Scoregames of FFr 80 million (£7.6 million). Additional consideration may be payable dependent on the future financial performance of Scoregames in an amount equal to 10 times pre-tax profit in excess of FFr 2.6 million, as determined by reference to the audited accounts of Scoregames for both the seven month period ending 31 January 2002 and for the twelve month period ending 31 January 2003. Any additional consideration will be capped at a total of FFr 120 million, and will be satisfied in cash or, at the purchaser's optionby the issue to the sellers of new Electronics Boutique shares, or by any combination thereof. The total number of new Electronics Boutique shares (if any) issued in satisfaction of the consideration will not in any event exceed 12 million.
Scoregames is the business trading name of ABC Games International, the legal entity being acquired. The French Franc consideration amounts referred to in this press release will be converted into Euro equivalents at the relevant time.
Philippe Charot, Scoregames's founder, and the other key members of the Scoregames management team have agreed to remain with the business until at least 31 January 2003. During this time they will work with Electronics Boutique to accelerate the rollout of the Scoregames retail chain in France.
