Handleman acquires Crave Entertainment Group

US videogames distributor and publisher Crave Entertainment Group has been acquired by music distributor Handleman Company in a deal worth USD 72 million.

The transaction, which is set to complete within the next 45 days, includes the assumption of working capital debt and additional performance-based considerations which could add up to USD 23 million to the purchase price.

The purchase will be paid for in cash and is expected to result in an accretion for the Handleman Company of approximately US 0.10 per share, dependant on the date of completion and final allocation of the purchase price.

CEG, which has headquarters in Newport Beach, California, distributes software and hardware to more than 30,000 retailers - including Toys'R'Us, GameStop, Best Buy, Sam's Club, Costco, Target and KoB Toys. Sales for the year ending August 2005 were approximately USD 239 million. CEG-published titles include World Championship Poker 2 and the Tokyo Xtreme Racer series.

"The acquisition of CEG expands our customer base, broadens our product line and is expected to be immediately accretive to earnings," said Handleman CEO Stephen Strome.

"We expect the combination of Handleman Company and CEG will provide growth opportunities for both organizations through cross-selling customers, services and products."

CEG will have access to Handleman's suite of proprietary category management systems, programs and processes. Senior executives - including CEO Nima Taghavi, COO Robert Dyer and president Michael Maas - will continue in their roles.

"We expect CEG's growth in the video game category to be enhanced by leveraging the resources of Handleman," said Taghavi.

"They are proven experts in Category Management with extensive experience and investments in software, systems, processes and field merchandising."