GN Store Nord shares rise on acquisition of gaming firm Steelseries – Reuters

A ReSound LiNX mock-up is pictured in Vienna November 22, 2013. Heinz-Peter Bader
COPENHAGEN, Oct 6 (Reuters) – Shares in Danish hearing aid and headset maker GN Store Nord (GN.CO) rose 3% on Wednesday after it said it would buy gaming gear company Steelseries from Nordic private equity company Axcel in a deal worth 8 billion Danish crowns ($1.25 billion).
"We have for some time searched for the right way for GN to enter the very interesting gaming market, being keenly interested in the 'high-end' segment," said René Svendsen-Tune, chief executive of GN Audio, the company's headset unit.
Steelseries, which had revenue of 2.2 billion crowns last year, employs about 350 people in offices in Denmark, France, the United States, China and Taiwan.
"We are primarily doing it because it's a growth case. It ensures, that GN continues to be a growth company," Chief Financial Officer Peter Gormsen told Reuters.
With immediate effect, GN would pause its current share buyback programme, which was launched in May, the firm said.
In the first half of 2021, Steelseries posted revenue of 1.3 billion, up 56% from the same period last year, and an earnings before interest, tax and amortisation (EBITA) margin of 14.0%.
"It's a company with many parallels to ours," Gormsen said. "They have an outsourced production, they sell in some of the same channels that we sell in, we just have a different volume and size, and that of course gives some economy of scale."
GN expects to reap operational synergies from the merger of about 150 million crowns annually by 2022. In 2021, transaction costs would be about 150 million.
Steelseries, which competes with companies such as Razer , Corsair (CRSR.O) and Logitech (LOGN.S), has around 15% market share in its gaming headset business, Gormsen said. Within gaming equipment broadly, Steelseries has about 7% market share.
The cash deal is subject to regulatory approvals and is expected to close early next year.
GN Store Nord on Tuesday cut its 2021 revenue growth forecast for its hearing aid unit to around 16% from 25% citing postponed product launches, sending its shares down.
($1 = 6.4225 Danish crowns)
Our Standards: The Thomson Reuters Trust Principles.
Subscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
Twitter Inc said on Wednesday it has agreed to sell mobile ad company MoPub to AppLovin Corp for $1.05 billion in cash, as the microblogging platform looks to focus more on advertisements on its own app and website.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Information, analytics and exclusive news on financial markets – delivered in an intuitive desktop and mobile interface.
Access to real-time, reference, and non-real time data in the cloud to power your enterprise.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2021 Reuters. All rights reserved