Acquisition is in line with Best Buy 2020
strategy
Strengthens company’s position and growth
opportunities in the fast-changing health space, with a focus on
the growing needs of the aging population
Best Buy Co., Inc. (NYSE: BBY), a leading technology products
and services provider, today announced that it has signed a
definitive agreement to acquire GreatCall, Inc. for $800 million in
cash.
GreatCall is a leading provider of connected health and personal
emergency response services to the aging population, with more than
900,000 paying subscribers. It has an award-winning approach to
customer care that helps older consumers stay independent longer,
provides peace of mind to family caregivers and reduces health care
costs. It offers an innovative combination of easy-to-use mobile
products and connected devices tailored for aging consumers. In
addition, GreatCall has a range of services, including a simple,
one-touch connection to trained, U.S.-based agents who can connect
the user to family caregivers, provide general concierge services,
answer service-related questions and dispatch emergency
personnel.
The acquisition is a manifestation of the Best Buy 2020 strategy
to enrich lives through technology by addressing key human needs.
It is specifically focused on addressing the growing needs of the
aging population with the help of technology products, services and
solutions. The health space is a large, growing market where
technology can help in particular address the needs of aging
consumers, their caregivers, payers and providers. Today, there are
approximately 50 million Americans over age 65, a number that is
expected to increase by more than 50 percent within the next 20
years.
Best Buy currently has a growing business selling health- and
wellness-related products. It also has recently been investing in
health-related initiatives focused on the aging population that
have included the participation of several of the nation’s leading
health care providers and insurers. The acquisition of
GreatCall will augment Best Buy’s existing efforts in the health
space, help bring compelling solutions to more customers, and help
fuel Best Buy’s further growth in the consumer and commercial
markets.
“Since the launch of GreatCall, we’ve focused on providing the
very best technology and services to the aging population, giving
them and their families the peace of mind that comes with the right
technology and support to help keep them safe and improve their
lives,” said David Inns, CEO of GreatCall. “We are excited to
partner with Best Buy to serve the active aging population on a
bigger scale. GreatCall is already a growing, profitable business
with annual revenue in excess of $300 million. By joining forces,
we can do even more for this population, combining our products,
services and expertise with Best Buy’s customer focus and scale to
meaningfully expand our reach.”
“We know technology can improve the quality of life of the aging
population and those who care for them,” said Hubert Joly, chairman
and CEO of Best Buy. “Now, we have a great opportunity to serve the
needs of these customers by combining GreatCall’s
expertise with Best Buy’s unique merchandising, marketing, sales
and services capabilities. We look forward to working closely
with David and his management team and are excited by the
opportunities we have in the health space and the strengths we can
bring to bear in this area, especially our experience with
technology and serving customers in their home.”
GreatCall will maintain its San Diego headquarters, as well as
its Care Centers in Carlsbad, California, and Reno, Nevada. Inns,
who has been with GreatCall since its formation in 2006, will
remain as CEO.
The transaction is subject to regulatory approvals and other
customary closing conditions and is expected to close by the end of
Best Buy's fiscal 2019 third quarter. The company expects the
impact of the acquisition on its non-GAAP* earnings to be neutral
in fiscal 2019 and fiscal 2020 and accretive by fiscal 2021.
The acquisition is consistent with Best Buy’s long-term capital
allocation strategy to first fund operations and investments in
growth, including acquisitions, and then to return excess free cash
flow over time to shareholders through dividends and share
repurchases, while maintaining investment-grade credit metrics. The
acquisition is not expected to impact Best Buy’s dividend strategy
or its previously communicated plan to spend $1.5 billion on share
repurchases during fiscal 2019.
As scheduled, Best Buy plans to release its fiscal 2019 second
quarter financial results on Aug. 28, 2018, before the market
opens.
Goldman Sachs & Co. LLC and Allen & Company LLC are
serving as financial advisors to Best Buy, and Simpson Thacher
& Bartlett LLP is serving as legal advisor to the company.
Raymond James & Associates, Inc. is serving as financial
advisor, and Kirkland & Ellis LLP is serving as legal advisor
to the seller, private equity firm GTCR.
About Best BuyWe at Best Buy work hard every day to
enrich the lives of consumers through technology, whether they come
to us online, visit our stores or invite us into their homes. We do
this by solving technology problems and addressing key human needs
across a range of areas, including entertainment, productivity,
communication, food preparation, security and health. Please visit
us at bestbuy.com and follow @BestBuy.
About GreatCallGreatCall is the leader in connected
health for active aging. With health and safety solutions for older
adults and their family caregivers, GreatCall’s innovative suite of
easy-to-use mobile products and award-winning approach to customer
care helps aging consumers live more independent lives. Products
and services include: Lively Mobile, Jitterbug Flip, Jitterbug
Smart, Lively Wearable, Lively Home and health, safety and wellness
apps Urgent Care, GreatCall Link, MedCoach and 5Star Urgent
Response Service. GreatCall’s products and services are sold
nationwide at leading retailers, as well as direct to consumers at
1-800-296-4993 and online at GreatCall.com. GreatCall is
headquartered in San Diego, CA. To learn more, please
visit GreatCall.com.
*Non-GAAP earnings exclude the impact of purchase accounting and
acquisition-related transaction costs.
This press release includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements address the financial conditions, results of
operations, business initiatives, growth plans, operational
investments and prospects of the company. You can identify these
statements by the fact that they use words such as “anticipate,”
“believe,” “assume,” “estimate,” “expect,” “intend,” “project,”
“guidance,” “plan,” “outlook,” and other words and terms of similar
meaning. These forward-looking statements are subject to a
number of risks and uncertainties that could cause actual results
to differ materially from the potential results discussed in the
forward-looking statements. Factors that could cause actual results
to differ materially include the following: the conditions to the
completion of the transaction may not be satisfied; closing of the
transaction may not occur or may be delayed; Best Buy may not be
able to achieve the anticipated benefits of the transaction;
revenues following the transaction may be lower than expected;
operating costs, customer loss, and business disruption (including,
without limitation, difficulties in maintaining relationships with
employees, customers, and suppliers) may be greater than expected;
the company may assume unexpected risks and liabilities. Please
refer to the company’s current SEC filings, including its most
recent 10-K, for more information on these risks and uncertainties.
Best Buy cautions that any forward-looking statements speak only as
of the date they are made, and Best Buy assumes no obligation to
update any forward-looking statement that it may make.
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version on businesswire.com: https://www.businesswire.com/news/home/20180815005630/en/
Best Buy Co., Inc.Investor Contact:Mollie O’Brien,
612-291-7735mollie.obrien@bestbuy.comorMedia Contact:Jeff
Shelman, 612-291-6114Jeffrey.shelman@bestbuy.com
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