US-based consumer electronics and wireless services retailer GameStop has signed a definitive agreement to divest its Spring Mobile business to authorised AT&T retailer Prime Communications for $700m.
Spring Mobile currently owns and operates 1,289 AT&T wireless stores.
The decision is part of a comprehensive review of a wide range of strategic and financial alternatives to improve shareholder value carried out by the company’s board of directors and outside financial advisors.
The transaction is expected to generate immediate cash proceeds as well as allows the retailer to serve its customers across video games and collectibles domains.
GameStop board of directors executive chairman Dan DeMatteo said: “This transaction enables GameStop to enhance our performance with an increased focus on the video game industry and the rapidly-growing collectibles space.
“These are areas where we have considerable experience and where we are well positioned to capitalise on our competitive position.
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“Our board continues to review strategic and financial alternatives to enhance shareholder value and we look forward to providing an update on the process at the appropriate time.”
The transaction is subject to customary regulatory approvals and closing conditions and will close in the fourth quarter of fiscal 2018.
GameStop will use the proceeds from the transaction to reduce its outstanding debt, fund share repurchases, reinvest in core video game and collectibles businesses to drive growth.
Headquartered in Grapevine, Texas, GameStop currently operates more than 7,100 stores across 14 countries.
It also operates more than 1,300 stores under Spring Mobile AT&T and Simply Mac technology brands.