Hot Topic Inc., the Los Angeles-based specialty retailer owned by Sycamore Partners, has reached a definitive agreement to acquire Geeknet Inc., parent firm of online retailers ThinkGeek and ThinkGeek Solutions.
Through a tender offer to commence no later than June 19, Hot Topic will acquire all outstanding shares of Geeknet for $17.50 a share. Including cash and cash equivalents of $37 million as of March 31, the transaction will have an equity value of about $122 million. Shareholders owning 21 percent of Geeknet’s outstanding shares have committed to participate in the offer.
Founded in 1999, ThinkGeek markets video game-themed merchandise, including apparel and accessories, and bills itself as “the premier retailer for the global geek community” and, on its homepage, encourages the interested geek to “clothe thyself.” Its Facebook page currently has more than 1 million likes.
ThinkGeek Solutions distributes video game-themed merchandise through licensed Web stores for the gaming community.
“We remain focused on increasing our visibility, providing a platform to stimulate ideas and creativity and expanding our product offerings to keep up with industry and customer demands,” said Kathryn McCarthy, Geeknet’s chief executive officer. “As a subsidiary of Hot Topic, Geeknet will be well-positioned to achieve these goals.”
Lisa Harper, ceo of Hot Topic, said, “Geeknet’s unique concept and approach to the online retail community is a strong fit with our business strategy, which is focused on delivering great products for avid fans of various licensed properties.”
Sycamore acquired Hot Topic for about $600 million in 2013. The retailer operates more than 650 stores in the U.S. and Canada and an e-commerce site at hottopic.com.
Geeknet is based in Fairfax, Va.