Main Image
MINNEAPOLIS (August 16, 2018)—Best Buy Co., Inc., a technology products and services provider, announced it has signed an agreement to acquire GreatCall, Inc., for $800 million in cash.
GreatCall is a provider of connected health and personal emergency response services to the aging population, with more than 900,000 paying subscribers. GreatCall offers a combination of easy-to-use mobile products and connected devices tailored for aging consumers. In addition, the company has a range of services, including a simple-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, according to a press statement. It is specifically focused on addressing the growing needs of the aging population with the help of technology products, services and solutions.
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, according to the company.
“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," said David Inns, CEO of GreatCall.
“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," said Hubert Joly, chairman and CEO of Best Buy. "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 August 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.
Visit greatcall.com and bestbuy.com for more information.
