Best Buy announced its biggest acquisition ever: GreatCall, maker of the Jitterbug line of phones for seniors, which counts 900,000 customers and $300 million in annual revenues. Best Buy said it would purchase the company for $800 million in cash.
Best Buy said it would keep GreatCall as an independent subsidiary, with existing CEO David Inns at the helm. The company plans to work to expand GreatCall’s efforts to sell phones, connected devices and other services, to a senior market that the company noted contains 50 million Americans today who are 65 or older and that is expected to grow more than 50% within the next 20 years.
“We know technology can improve the quality of life of the aging population and those who care for them,” Best Buy CEO Hubert Joly 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.”
“With Best Buy’s 1,000 retail locations, deep e-commerce experience and the ability to service customers in their homes with Geek Squad, this is an incredibly powerful partnership that is going to take our mission to the next level,” GreatCall’s Inns said in a statement.
Best Buy said it expects the purchase to close in the fiscal third quarter of 2019, and for the purchase to be accretive to its finances by fiscal 2021. Best Buy pointed out the purchase is its largest acquisition in its history—more than Geek Squad, Magnolia, Pacific Sales and Future Shop—and is the first since Joly became CEO in 2012.
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GreatCall was founded in 2006 by wireless industry luminaries Arlene Harris (who hailed from ICS Communications and Metromedia) and Marty Cooper (widely regarded as the father of the modern cellphone). By 2009, the company had raised more than $100 million in venture capital and had reached operational profitability.
GreatCall’s CEO Inns reiterated on Thursday that the company remains a growing, profitable business.
GreatCall is one of two major MVNOs targeting the market for seniors. Consumer Cellular began targeting the senior market in 2007 and today it counts around 2.9 million customers. Interestingly, that market has recently risen to prominence among the nation’s top wireless network operators, considering Verizon, T-Mobile and Sprint all now offer plans specifically for customers 55 years and older.