AO World to acquire Mobile Phones Direct
AO World, one of the leading European online electrical retailers, has announced that it has conditionally agreed to acquire Mobile Phones Direct Limited for a cash-free, debt-free enterprise value of £32.5m.
MPD is a leading online-only retailer of mobile phones in the United Kingdom, and is based in Thatcham, near Reading. MPD operates through two online brands, Mobile Phones Direct (www.mobilephonesdirect.co.uk) and Smart Phone Company (www.smartphonecompany.co.uk).
MPD’s websites had approximately 13.6 million visitors in 2017, up from approximately 11.6 million in 2016. MPD generated revenues of £121.7m and EBITDA of £5.5m in the year ended 31 March 2018 with revenue CAGR of 24 per cent (2016-2018). MPD has an experienced senior management team, large customer base and strategic relationships with key mobile network operators and mobile phone distributors in the UK.
The acquisition will significantly increase the scale of AO’s mobile proposition, which is currently limited to the sale of handsets only (without airtime or associated services). The combination of breadth of product and services across the two businesses presents a significantly improved offering for the combined customer base.
This move marks a significant step in AO’s strategy of developing existing categories and services, and adding new complementary categories to its offering for the benefit of customers. It also provides access to a large and important market, which is adjacent to AO’s current electricals offering and is well positioned to benefit from continued online migration.
Steve Caunce, CEO of AO World, said: “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.
“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 prior to 31 March 2019.
Pictured right: Steve Caunce, CEO of AO World. Left: COO of AO World, Danny Emmett.