decor decor
"The cloud never comes from the quarter of the horizon from which we watch for it."

-Elizabeth Gaskell

Best Buy Sells mindSHIFT to Ricoh Company

martinwolf Transaction Analysis
Financial Overview
  • Not Disclosed            

Transaction Facts

  • Ricoh Company, Ltd. (TSE:7752), an office supply and digital imaging company based in Tokyo, announced today that it had entered into an agreement to acquire mindSHIFT Technologies, Inc. from Best Buy Co., Inc. (NYSE:BBY).
  • Best Buy previously acquired mindSHIFT in November 2011 for $167 million, and at the time many observers expected Best Buy to use the acquisition to grow its services offerings and complement its consumer services business (primarily its Geek Squad division).
  • In 2012, mindSHIFT acquired White Glove Technologies, a SMB-focused managed services provider, gaining a strong regional market presence in the Southwest U.S. and bolstering its access to the SMB marketplace. Previously, it had acquired three other managed services companies in 2011, 2010 and 2008.
  • According to the press release announcing the deal, mindSHIFT works with 6,900 clients – approximately 1,500 more than when they were initially bought by Best Buy.

Focusing on Core Services versus Expanding Capabilities

  • Focusing on Core Services: Despite growing mindSHIFT’s customer base by approximately 30%, Best Buy realized succeeding in the managed services space required significantly more resources than they were able to commit at the current time.
  • Divesting Non-Core Assets: Best Buy announced disappointing earnings for the 2013 holiday season, and its shares have dropped more than 30% as investors look for signs of a turnaround. The divestment of mindSHIFT is a sign that the company is retrenching itself in an attempt to address these core issues.
  • Expanding Capabilities: Conversely, Ricoh is looking to expand beyond its core offerings to compete better with its competitors, such as Konica Minolta’s All-Covered. mindSHIFT is an attractive asset, with significant size and reach in the SMB market and few similarly sized competitors.
  • Early Indicator of Future M&A: The Japanese market is slowly recovering after a long slump, and this combined with historically low interest rates provides an opportunity for Japanese companies to shop for proven assets across the globe.

For more information, read the press release here.

 

martinwolf was not the advisor in this transaction.
previous post Back to Articles next post

03 Jan 2022

Office Depot Sells CompuCom Systems

 Financial Information ($USD) Transaction Value: ~ $305 million Enterprise Value: $1.72 billion EV/LTM Revenue: 0.19x EV/LTM EBITDA: 3.85x  Transaction Details The ODP Corporation (NASDAQ: ODP) announced that it has sold its CompuCom Systems subsidiary to an affiliate of Variant Equity in a transaction valued up to $305 million. The transaction consideration of up to $305 million consists...

29 Dec 2021

Happy Holidays – The 2021 martinwolf Annual Letter

Dear Clients, Partners, and Friends of martinwolf M&A Advisors,   I hope you all are having an enjoyable holiday season with family and friends.   It’s been my tradition in this annual end-of-year letter to spend time reflecting on the past year, and to look forward to what the next year holds for us. We have plenty...

20 Dec 2021

Oracle To Acquire Cerner Corporation

Financial Information ($USD) Enterprise Value: $28.3 Billion EV/LTM Revenue: 8.12x EV/LTM EBITDA: 17.71x  Transaction Details Oracle (NYSE: ORCL) today announced an agreement to acquire Cerner Corporation (NASDAQ: CERN) through an all-cash tender offer for $95.00 per share, or approximately $28.3 billion in equity value. Cerner is a leading provider of digital information systems used within hospitals and health systems to...