Best Buy Purchases Smartphone for the Elderly Provider GreatCall for $800M
In an $800 million deal, Best Buy is acquiring GreatCall Inc., a company that sells mobile devices aimed at connecting users—primarily aging adults—to health and personal emergency response services. The acquisition, announced Wednesday, is part of Best Buy’s 2020 plan, which aims to bring more technology addressing key human needs to the electronics giant’s stores.
“We know technology can improve the quality of life of the aging population and those who care for them,” said Hubert Joly, chairman and CEO of Best Buy, 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’s mobile devices—namely its Jitterbug phones—are designed to be easy to use and tailored to aging consumers to help them stay independent longer, reduce health care costs, and provide peace of mind to family caregivers. Features of GreatCall’s devices include a one-touch connection to trained agents in the U.S. who can put the user in touch with a caregiver, provide general concierge services, answer device-related questions, and dispatch emergency personnel.
Per the terms of the deal,GreatCall, founded in 2006 and currently owned by private equity firm GTCR, will maintain its San Diego headquarters and care centers spread across Carlsbad, California and Reno, Nevada. GreatCall CEO David Inns will also remain at his position.
The deal comes at a time when about 50 million Americans are over the age of 65, according to the United States Census Bureau. Moreover, a report from the Population Reference Bureau found that this very population is expected to increase by around 50 percent within the next 40 years.
GreatCall itself already serves 900,000 paying subscribers and has an annual revenue of more than $300 million.
“Since the launch of GreatCall, we’ve focused on providing the very best technology and services to the aging population,” said Inns in prepared remarks. “We are excited to partner with Best Buy to serve [the population] on a bigger scale.”
By sharing resources and gaining Best Buy’s customer focus and scale, Inns added that GreatCall’s own reach would be able to expand.
Best Buy’s interest in GreatCall aligns with Best Buy’s growth strategy, as the company looks to expand its consumer base overall — both through products and initiatives, such as its Teen Tech Centers program.
Pending regulatory approvals and other procedural aspects, the acquisition is expected to close by the end of Best Buy’s fiscal 2019 third quarter. The legal and financial advisor entities of Goldman Sachs & Co. LLC, Allen & Company, Simpson Thatcher & Bartlett, Raymond James & Associates Inc, and Kirkland & Ellis LLP are all overseeing the transaction.