Private equity-owned Hot Topic Inc. is buying another pop-culture themed retailer. Geeknet Inc., the parent company of online store ThinkGeek, agreed to a $122 million deal giving Hot Topic - a shopping mall staple - a larger presence online.
The price tag of the deal includes $37 million of cash and cash equivalents. Hot Topic has been backed by Sycamore Partners since 2013. The New York private equity firm, with more than $1 billion in capital under management, has also invested in Talbots Inc., Mast Global Fashions and Pathlight Capital.
Hot Topic also owns Torrid, which sells fashion apparel for women size 12 and up, and Blackheart, which sells lingerie and beauty products. With ThinkGeek, it expands its offerings as a purveyor of merchandise tied to video games, comic books and sci-fi franchises.
Geeknet, which once did business as SourceForge, used to be a part of VA Linux Systems, one of the most notable initial public offerings from the dot-com era of the late 1990s. The company, the first to sell personal computers with the open-source Linux operating system pre-installed, opened with an IPO of $30 on Dec. 9, 1999 and later that day saw its stock price reach $320 - the largest first-day gain in Nasdaq history.
The company eventually became Geeknet in 2009 and made ThinkGeek its primary business. The sale comes as more retailers and investors seek specialty shops. For more coverage, see Boutique Appeal and Retail Reckoning.