Contact: Scott Denne
Here’s something that is selling at Best Buy: its own acquisitions. With the divestiture of mindSHIFT Technologies, Best Buy has now sold every tech business it has bought since 2007. During better days, the electronics retailer experimented in tech by buying a few companies as it sought possible synergies with its retail outlets. Now that its core business is facing harder times, it has abandoned that strategy, with the SMB-focused MSP being the latest to go in a sale to Ricoh.
Best Buy acquired mindSHIFT in November 2011 for $167m to capture more of the SMB market by coupling the MSP with Geek Squad, its in-store services group and its lone remaining technology buy. The rationale mirrors Best Buy’s $97m acquisition of IP phone service provider Speakeasy, which it divested at the end of 2011. Napster, the online music service it bought for $121m in 2008, a year after Speakeasy, was also intended to attract new customers. That business was sold in pieces to Rhapsody International.
MindSHIFT appears to have grown as part of Best Buy: at the time of the sale it had 5,400 customers and 500 employees, and today it boasts 6,900 customers and 650 employees (terms of the sale to Ricoh and mindSHIFT’s current revenue weren’t disclosed). Given Best Buy’s current problems with shrinking sales and its track record of buying businesses that turned out to have little relevance to its core, we don’t anticipate that Best Buy will be back in the tech M&A market anytime soon.
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