Phone business

GameStop exits mobile phone business and pockets $700 million

GameStop Corp is selling its Spring Mobile business, which owns and operates 1,289 AT&T wireless stores, to Prime Communications, LP for $700 million. The move allows the retailer to focus on its core strength of video games and collectibles.

GameStop’s Board of Directors, in conjunction with outside financial advisors, is undertaking a comprehensive review of a wide range of strategic and financial alternatives to enhance shareholder value. As part of its review, GameStop’s Board of Directors has determined that the sale of Spring Mobile is in the best interests of the company and its shareholders, as the transaction generates immediate cash proceeds and allows the company to focus more on meeting the entertainment needs of its customers.

“This transaction allows GameStop to improve its performance with a greater focus on the video game industry and the rapidly growing collectibles space,” said Dan DeMatteo, Executive Chairman of the Board of Directors of GameStop. “These are areas where we have considerable experience and where we are well placed to capitalize on our competitive position.”

Proceeds from the sale will be used to reduce the company’s outstanding debt, fund share buybacks, and reinvest in core video game and collectibles businesses to drive growth.

The transaction is expected to close in the fourth quarter of fiscal 2018, subject to regulatory approvals and customary closing conditions.