GN Store Nord shares rise on acquisition of gaming firm Steelseries

COPENHAGEN (Reuters) -Shares in Danish hearing aid and headset maker GN Store Nord rose 3% on Wednesday after it said it would buy gaming gear company Steelseries from Nordic private equity company Axcel in a deal worth 8 billion Danish crowns ($1.25 billion).

“We have for some time searched for the right way for GN to enter the very interesting gaming market, being keenly interested in the ‘high-end’ segment,” said René Svendsen-Tune, chief executive of GN Audio, the company’s headset unit.

Steelseries, which had revenue of 2.2 billion crowns last year, employs about 350 people in offices in Denmark, France, the United States, China and Taiwan.

“We are primarily doing it because it’s a growth case. It ensures, that GN continues to be a growth company,” Chief Financial Officer Peter Gormsen told Reuters.

With immediate effect, GN would pause its current share buyback programme, which was launched in May, the firm said.

In the first half of 2021, Steelseries posted revenue of 1.3 billion, up 56% from the same period last year, and an earnings before interest, tax and amortisation (EBITA) margin of 14.0%.

“It’s a company with many parallels to ours,” Gormsen said. “They have an outsourced production, they sell in some of the same channels that we sell in, we just have a different volume and size, and that of course gives some economy of scale.”

GN expects to reap operational synergies from the merger of about 150 million crowns annually by 2022. In 2021, transaction costs would be about 150 million.

Steelseries, which competes with companies such as Razer, Corsair and Logitech, has around 15% market share in its gaming headset business, Gormsen said. Within gaming equipment broadly, Steelseries has about 7% market share.

The cash deal 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 unit to around 16% from 25% citing postponed product launches, sending its shares down.

($1 = 6.4225 Danish crowns)

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