GN Store Nord shares increase following acquisition of games company Steelseries
- GN expects annual synergies of DKK 150 million
- “It’s a case of growth,” says GN CEO
- Steelseries holds 15% market share in gaming headsets
COPENHAGEN, October 6 (Reuters) – Shares of Danish hearing aid and headset maker GN Store Nord (GN.CO) rose 3% on Wednesday after announcing it would buy gaming hardware company Steelseries from the Nordic private equity firm Axcel in a deal worth DKK 8 billion ($ 1.25 billion).
“We have been looking for some time for the right path for GN to enter the very interesting gaming market, with a keen interest in the high end segment,” said René Svendsen-Tune, Managing Director of GN Audio, the unit company helmet. .
Steelseries, which achieved a turnover of 2.2 billion crowns last year, employs around 350 people in offices in Denmark, France, the United States, China and Taiwan.
“We do this mainly because it’s a case of growth. It ensures that GN continues to be a growth company,” CFO Peter Gormsen told Reuters.
With immediate effect, GN would suspend its current share buyback program, which was launched in May, the company said.
In the first half of 2021, Steelseries achieved a turnover of 1.3 billion, up 56% compared to the same period last year, and a profit margin before interest, taxes and depreciation (EBITA) of 14 , 0%.
“It’s a business with many parallels to ours,” Gormsen said. “They have outsourced production, they sell in some of the same channels that we sell, we just have a different volume and size, and of course that gives some economy of scale.”
GN expects to derive operational synergies from the merger of around 150 million crowns per year by 2022. In 2021, transaction costs would be around 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 in general, Steelseries has a market share of around 7%.
The cash transaction 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 to around 16%, from 25%, citing postponed product launches, lowering its shares.
($ 1 = 6.4225 Danish kroner)
Reporting by Nikolaj Skydsgaard and Stine Jacobsen; Editing by Louise Heavens and Edmund Blair
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