BKS to acquire Babbages:
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Barnes & Noble acquires software, game company
By Bloomberg News
Special to CNET News.com
October 6, 1999, 4:10 p.m. PT
NEW YORK--Barnes & Noble agreed to buy closely held Babbage's Etc. for $215 million in cash and assumed debt, expanding its sales of video games and entertainment software.
Babbage's Etc. is one of the largest U.S. sellers of video games and entertainment software. Barnes & Noble will get 495 stores run under the names Babbage's, Software Etc., and GameStop, as well as the gamestop.com retail Web site. Barnes & Noble said it expects the acquisition to add 10 cents a share to earnings in its fourth quarter ending in January.
The purchase fits Barnes & Noble's strategy of investing in complementary businesses that are growing rapidly. It also wants to solidify its position as a leading retailer of books, music, video, and related items.
Babbage's principal owner is Leonard Riggio, Barnes & Noble's chief executive. The transaction was examined and recommended by a special board committee, the company said.
The purchase is subject to regulatory approvals and will be financed through Barnes & Noble's existing $850 million senior credit line.
Barnes & Noble's shares fell 0.13 to 26.5. It made its announcement after the close of U.S. markets.
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