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AO World to Acquire Mobile Phones Direct in GBP 32.5m Deal.

M2 EQUITYBITES-November 13, 2018-AO World to Acquire Mobile Phones Direct in GBP 32.5m Deal


13 November 2018 - European online electrical retailer AO World plc (LSE: AO) has conditionally agreed to acquire UK-based online retailer Mobile Phones Direct Ltd. for a cash-free, debt-free enterprise value of GBP 32.5m (USD 42.14m), the company said.

MPD is an 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 and Smart Phone Company. MPD's websites had approximately 13.6m visitors in 2017, up from approximately 11.6 m in 2016.

MPD generated revenues of GBP 121.7m and EBITDA of GBP 5.5m in the year ended 31 March 2018 with revenue CAGR of 24% (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 and sophistication 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 acquisition is a 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.

The acquisition is expected to complete prior to 31 March 2019.

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Publication:M2 EquityBites (EQB)
Geographic Code:4EUUK
Date:Nov 13, 2018
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