AO World bolsters mobile offering by sealing £32.5m deal to snap-up Mobile Phones Direct

Online retailer AO World bolsters mobile offering by sealing £32.5m deal to snap-up Mobile Phones Direct

  •  AO World claims the deal is a ‘significant step forward’ ahead of 5G introduction
  •  Acquisition expected to be completed by March 31, subject to approvals

AO World has struck a ‘game-changer’ multi-million pound deal to acquire online phone retailer Mobile Phones Direct to boost its mobile supply offering before the introduction of the 5G network.

The electrical goods giant, whose mobile offering is currently limited to handsets only, agreed to pay £32.5million to acquire the company. 

Mobile Phones Direct generated a revenue of £121.7million in revenue during the 12 months up to March 31 as well as underlying earnings of £5.5million.

The £32.5million acquisition of Mobile Phones Direct expands AO World's mobile offering and is expected to be complete within the first 3 months of 2019

The £32.5million acquisition of Mobile Phones Direct expands AO World’s mobile offering and is expected to be complete within the first 3 months of 2019

Its two websites, Mobile Phones Direct and Smartphone Company, also attracted 13.6 million visitors last year.

Chief executive Steve Caunce said: ‘This deal represents a significant step forward in our strategy of developing our growing range of online electricals and adding new complementary categories that customers want and expect from AO.

‘With 5G services expected to launch over the next two years and as the electrical products we sell become more connected than ever before, moving further into the mobile market is a logical next step for us.’ 

Richard Baxendale, current CEO of Mobile Phones Direct, added: ‘This new venture marks an exciting moment for both AO and Mobile Phones Direct, creating something that we believe will be a real game changer for the industry.’ 

The acquisition is expected to be completed by March 31, 2019, subject to shareholder and competition watchdog approval.

Back in July, AO World warned that weaker consumer demand had impacted summer trading in its core markets, despite a rise in sales in the first half of the year.

However, the company generated group revenue of £404.2million in the six months to 30 September 2018, an increase of 9.9 per cent from a year earlier.

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