Board game distribution major Alliance to be bought by namesake Alliance Entertainment after company sees off Universal Distribution’s $39m bid

One of North America’s biggest tabletop gaming distributors, Alliance Game Distributors, has been bought by its namesake but unrelated company Alliance Entertainment Holdings as part of the bankruptcy auction for its fallen owner Diamond Comics.

Nasdaq-listed Alliance Entertainment, a major distributor of music, movies, toys and consumer electronics, was the winning bidder for the vast majority of the assets of Diamond, which filed for bankruptcy protection in January while owing tens of millions of dollars to a long list of creditors.

Alliance Game Distributors initially received a $39m “stalking horse” bid from Canadian peer Universal Distribution, designed to set a lower boundary for any other potential bidding.

Financial details of the final bid for the Alliance assets were not disclosed, although the winning bidder would have to had bid at least $40,865,000 – the value of the Universal bid plus a 3% break-up fee, plus Universal’s expenses (capped at 0.5% of the sale price), plus $500,000.

Alliance will also pick up Diamond’s US comic distribution business, Diamond Select Toys & Collectibles and Collectible Grading Authority through the deal.

Diamond’s creditors include Penguin Random House, which is alone owed more than $9.2m, and the Pokemon Company.

On the tabletop side, National Entertainment Collectibles – the owner of tabletop gaming major WizKids – is owed more than $2.6m, Hasbro over $1m, Wizards of the Coast more than $914,000 and tabletop gaming sales and fulfillment service Publisher Services Inc (PSi) about $223,000.

Separately, the Board Game Insider Podcast reported earlier this month that Renegade Game Studios is a guarantor on $41m of debtor-in-possession financing from JP Morgan Chase, which was arranged by Diamond “to fund post-petition operating expenses and ensure adequate working capital to meet its obligations to associates and suppliers”.

It cited Renegade founder Scott Gaeta, who told the podcast Diamond founder Steve Geppi is an owner at Renegade, which was what prompted the guarantor arrangement.

Gaeta reportedly told the podcast that the guarantor arrangement would be over when the debtor-in-possession loan is paid back after Diamond is purchased, which is now expected to take place on April 10.

Alliance Game Distributors has been a heavyweight of US board game distribution since it was created through the merger of Chessex and The Armory in 1998, with both companies already major players in the sector before the deal was signed.

The company had maintained its strong position since being bought by Comics distribution giant Diamond in 2000, despite the ongoing woes of its parent company in recent years.

Diamond built itself into an almost monopolistic position in comic book distribution across close to 40 years, but a temporary shutdown caused by the Covid-19 pandemic saw it lose powerhouse publishers including DC and Marvel, while retailers have long complained about the company’s attitude and business practices.

Alliance Entertainment currently stocks more than 325,000 unique products, which it distributes to more than 35,000 retail storefronts across 72 countries. Its stock listed on the Nasdaq exchange is currently valued at more than $220m.

Alliance Game Distributors, meanwhile, stocks about 15,000 unique products, which it provides to more than 3,000 independent hobby retailers across North America.

Company CEO Jeff Walker said, “This is a transformative opportunity to expand our leadership in the world of gaming and physical collectibles and deepen our reach into thriving fan-driven categories.

“With their legacy of exclusive titles, deep retail relationships, and strong presence in comics, tabletop games, and collectible merchandise, these businesses are highly complementary to our existing distribution and fulfillment model.

“We see powerful cross-selling potential between our product lines and customer bases, expanding the reach of our expanded product portfolio across both mass retail and specialty channels.”

Bruce Ogilvie, executive chairman of Alliance Entertainment, added, “To the suppliers, creators, and publishing partners that make this ecosystem so dynamic, we’re excited to collaborate and build lasting value together.

“And to the customers who rely on these brands every day, we remain committed to delivering the excellent service and reliability you expect, and taking it even further.”