GameStop has edged out Hot Topic in the fight to acquire the parent company of ThinkGeek, the popular online retailer that sells everything from Tatooine sunset dresses to Kelvin .36 All in One Tools.
It was an unlikely (and until now, mostly unknown) bidding war that pitted a video game seller against a clothing retailer. GameStop has been making moves to diversify its business beyond the sale of video games; Hot Topic has been trying to diversify beyond JNCO jeans and Tool t-shirts.
GameStop said it would purchase all outstanding shares of Geeknet, Inc (parent of ThinkGeek and ThinkGeek Solutions) for $20 per share in cash.
The total transaction amounts to $140 million, an offer that GameStop says “represented a superior proposal” when compared to Hot Topic’s offer, announced about a week ago. The Hot Topic deal has been terminated, with Geeknet paying a termination fee that will be reimbursed by GameStop.
Along with an expected immediate “$100+ million” in annual net sales, a new retail channel, and wider internet presence, GameStop CEO Paul Raines explained why the deal makes sense for his company:
“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 CEO Kathryn McCarthy added that the deal will expand ThinkGeek’s offerings as well.
The boards of both companies have approved the deal, which is slated to close by GameStop’s second quarter, per customary closing conditions.