Game announces IPO

Alice Murray
19 May 2014

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Game Digital, the specialist gaming retailer rescued by turnaround house OpCapita, has announced its intention to float.

The company intends to list on the main market of the London Stock Exchange and expects to raise £12m from the issue. The proceeds will be used for corporate purposes, including additional working capital to support further growth. The IPO is expected to reach a free float of at least 35%.

Canaccord Genuity is acting as financial adviser, sole sponsor and joint bookrunner for the IPO.

Today, Game operates a multi-channel retail strategy, comprising 560 physical outlets across the UK and Spain, marking a significant slim-down from the 874 stores the group used to run when facing trouble back in early-2012. The retailer also operates e-commerce and mobile channels.

For the year to 25 January 2014, Game posted revenues of £815.7m and EBITDA of £47m. The company has also secured a £50m stock finance facility from HSBC.

Game was acquired by OpCapita in a £1 deal in April 2012 after the company fell into administration. The transaction saw the turnaround house acquiring the group's remaining 333 stores and paying a reported £50m for its £85m of debt.

Two weeks following the rescue deal, OpCapita acquired the Iberian operations of Game, which operated 290 stores at the time of the deal.

In August 2012, Genesis Capital acquired the Czech subsidiary of the company. The buyer was attracted by the steady growth of the gaming industry in central and eastern Europe.

OpCapita only holds a less than 1% stake in the company, with Elliot Advisors the majoirty owner following a transaction in March this year.

The company made an estimated loss of £18m in the year ending 31 January 2012, and many of its main suppliers refused to provide products. The firm went into administration in March 2012 when it proved unable to repay its £85m debts in rent, wages and to creditors including RBS, Barclays and HSBC. PwC, Game's administrators, closed 277 stores and made 2,104 members of staff redundant in a bid to stem further losses.

Founded in 1991 and headquartered in Basingstoke, Game is a video games retailer. The firm grew internationally through acquisitions, including Gamewizards in Australia and Gamestation in the UK for £74m.