San Diego company sold to Best Buy for $800 million
Deal is for GreatCall, a provider of mobile phone and health services to seniors.
San Diego’s GreatCall, which provides mobile phone and connected health services to seniors, is being sold to Best Buy for $800 million in cash — the secaond time that GreatCall has changed ownership in the last 14 months.
The deal furthers the nation’s top electronics retailer’s strategy of selling more health and wellness products. Minnesota-based Best Buy is focusing on technology and services targeting an aging population.
There are 50 million Americans ages 65 and older, a number that is expected to increase by more than 50% within the next 20 years, according to Best Buy.
“We know technology can improve the quality of life of the aging population and those who care for them,” Hubert Joly, chairman and chief executive of Best Buy, said in a statement. “Now, we have a great opportunity to serve the needs of these customers by combining GreatCall’s expertise with Best Buy’s unique merchandising, marketing, sales and services capabilities.”
GreatCall will maintain its San Diego headquarters, as well as its call centers in Carlsbad, Calif., and Reno. David Inns will continue as chief executive. The company has about 1,000 employees, most of them at its two call centers.
“GreatCall is already a growing, profitable business with annual revenue in excess of $300 million,” Inns said in a statement. “By joining forces, we can do even more for this population, combining our products, services and expertise with Best Buy’s customer focus and scale to meaningfully expand our reach.”
Founded in 2006, GreatCall has about 900,000 subscribers nationwide for its mobile services tailored for the elderly and their family caregivers, including Jitterbug mobile phones with big buttons for easy dialing.
In June 2017, GreatCall was acquired by Chicago private equity firm GTCR for an undisclosed price. Inns remained at the helm of the company in partnership with GTCR.
GreatCall also provides healthcare and medication reminder apps, 5Star emergency response, 24/7 access to a nurse or doctor and other services via a seniorcentric wireless plan. In addition, the company offers wearable emergency response devices.
Best Buy has completed a five-year turnaround plan as it battles Amazon.com for supremacy in the U.S. consumer electronics market. It has invested in improving its website, matching prices and providing better customer service to bring shoppers into its stores.
The strategy also includes expansion into health technology. Best Buy has been investing in health-related programs focused on an aging population that include working with several healthcare providers and insurers, the company said.
For its fiscal first quarter, which ended May 5, Best Buy beat Wall Street’s expectations for both revenue and earnings. The company said strong consumer demand drove a 7% increase in sales and 11% gain in earnings from a year earlier.
The GreatCall deal is subject to regulatory approvals. It is expected to close by the end of October. Best Buy expects the acquisition will have minimal effect on earnings in fiscal 2019 and 2020, but it is expected to add to profit thereafter.
Best Buy announced the acquisition Wednesday after markets closed. Its shares rose 53 cents, or 0.7%, to $76.91 on Thursday.