AO plans £32.5million mobile phone acquisition
AO World in Bolton says it has “conditionally agreed” to acquire Mobile Phones Direct for £32.5m.
MPD is one of the country’s leading online-only mobile phone retailers, operating 2 brands, Mobile Phones Direct and Smart Phone Company.
In 2017, the 2 sites had around 13.6m visitors, generating revenues of £121.7m.
AO said the deal is for a “cash-free, debt-free enterprise value” which represents 5.9x MPD’s reported net income to March 31st (£5.5m), plus interest.
“This deal represents a significant step forward in our strategy of developing our growing range of online electricals and adding new complementary categories that customers want and expect from AO,” explained Steve Caunce, CEO of AO World Plc.
“Mobile Phones Direct already has a leading position within the UK online mobile phone market and is a business which is highly complementary to AO. In coming together, AO will achieve instant scale and be well-placed for future opportunities within a highly attractive and growing UK mobile phone market.
“With 5G services expected to launch over the next two years and as the electrical products we sell become more connected than ever before, moving further into the mobile market is a logical next step for us.”
The acquisition is expected to complete before March of next year.