These Outside:TheWHIR NCC Posts are an adjunct to Tom Millitzers's M&A WHIR Blogs - Tom refrains from using that forum as an advertisement for NCC. These Outside blogs contain additional information regarding those blogs, sometimes advice that would be too complicated for those writings, some ideas that could appear to be self-serving in those blogs. As you will see some of these include adjunct information, business advice or thoughts that just may not always fit, but we feel are noteworthy. Thanks.
This blog focuses on the background of why Best Buy would consider and complete the mindSHIFT acquisition. At NCC we understand that in all acquisitions there is an element of strategy.
Strategy: Best Buy: $10 billion market cap, $50 billion revenue and over $2 billion cash on hand. As stated, a $167 million acquisition is relatively very small compared to the buyer. Acquisitions like this are for strategic purposes. Lays a groundwork to build on. Something every buyer should consider in its acquisitions. Here we see that distinct possibility. It also should be noted that Best Buy can afford to fail (yes we hate failure) in an acquisition of this nature, no they don't want to...but it would not break the bank.
Some of the information we reviewed in writing this which we found of interest:
Best Buy has some 2500 small stores across Europe. Apparently the 'Big Box" concept did not fly in the UK as they are closing 11 of these locations. Could smaller be bigger in EU?
Management is always a key in acquisitions:
Paul Chisholm - CEO of mindSHIFT in his past position at UK's Colt Telecom Group was ranked by The Harvard Business Review as on of the The 100 Best-Performing CEOs in the World.
Management and success is always a great attraction. It could be that his European success is also attractive in the acquisition.
Growth:
Private firms such as mindSHIFT are often tough to figure out, after all private is private. The one snippet we did notice was that in the four year period, 2006 to 2009 mindSHIFT revenues grew 124%
Frankly for that period growth was nice but fairly low...It could be that it kicked in during 2010 and 2011, we don't know.
The Future:
One can only wonder here at NCC International if other big box stores such as Staples or Office Depot will follow suit. Office Depot and the like already provide computer repair...
--------
About NCC - we follow the industry - but we sell Internet companies. We want to assist you in your growth...
For selling your company contact Tom Millitzer @ 239.282.5550 (-05 GMT) tomm@com-broker.com