Published on November 9th, 2018 | by The GC Team0
AO World to acquire Mobile Phones Direct
Online electrical retailer AO World has conditionally agreed to acquire Mobile Phones Direct (MPD), a leading online-only retailer of mobiles, for a cash-free, debt-free enterprise value of £32.5m.
MPD, which operates through two online brands, Mobile Phones Direct (www.mobilephonesdirect.co.uk) and Smart Phone Company (www.smartphonecompany.co.uk), generated revenues of £121.7m and EBITDA of £5.5m in the year ended 31 March 2018. The company has a large customer base and strategic relationships with key mobile network operators and mobile phone distributors in the UK.
AO today said the acquisition will significantly increase the scale and sophistication of its mobile proposition, which is currently limited to the sale of handsets only, without airtime or associated services.
“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,” said AO World CEO Steve Caunce.
“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.”
AO today said it remains on track with its strategic plan and is well placed to capitalise on the forthcoming peak trading period. Group revenues for the six months to 30th September 2018 grew 9.9% to £404.2 million. UK revenue rose 5.7% to £334.8 million and EU revenue grew 35% to €78.4 million.
The MPD acquisition is expected to complete prior to 31 March 2019.