Best Buy Pays $1.3B to Buy Out U.K. Partner in Mobile Venture
Electronics retail giant Best Buy (NYSE:BBY) acquired the remaining interest in a U.S. mobile venture from Carphone Warehouse Group on Monday in a $1.3 billion deal.
Richfield, Minn.-based Best Buy also disclosed plans to shut down its Best Buy-branded U.K. megastores and acquire a cloud-computing company for less than $200 million.
Best Buy said it will now fully own Carphone Warehouse’s interest in the venture and close 11 big box pilot stores in the U.K. Best Buy said it plans to focus on 2,500 small box stores branded The Carphone Warehouse and The Phone House.
The companies are also creating a new venture, called “Global Connect,” to provide intellectual capital and connections expertise.
“Each of these actions represents an exciting growth opportunity for Best Buy and near and long-term value for our shareholders,” Best Buy CEO Brian Dunn said in a statement.
Best Buy said it expects its deal to add to its bottom line beginning in fiscal 2013 and be financed with existing cash on its balance sheet.
Meanwhile, Best Buy revealed a $167 million deal to acquire cloud-services provider MindShift Technologies, which has more than 5,400 clients and 25,000 managed desktops. The transaction is expected to close by the end of the year.
"There's no question that acquiring the skills, capabilities and clients of mindSHIFT has the potential to help expand Best Buy's global services capabilities in the vast small and mid-sized business market," said George Sherman, senior vice president of Best Buy Services.
Shares of Best Buy slipped 1.06% to $27.02 ahead of Monday’s open. They have declined more than 20% year-to-date.