The online retailer AO World strengthens the mobile offer by signing a £ 32.5 million deal for the installation of mobile phones Direct
- AO World claims that the agreement is a "significant step forward" before the introduction of the 5G
- The acquisition should be completed by March 31, subject to approval
This is Money Reporter
AO World has signed a multimillion-dollar "game-change" agreement to acquire the Mobile Phones Direct online phone retailer to enhance its mobile supply offer prior to the introduction of the 5G network.
The electric products giant, whose mobile offer is currently limited to telephones, has agreed to pay £ 32.5 million to acquire the company.
Direct mobile phones generated revenues of £ 121.7 million in revenues during the 12 months up to 31 March and underlying profits of £ 5.5 million.
The £ 32.5m acquisition of Mobile Phones Direct expands the AO World mobile offering and is expected to be completed within the first 3 months of 2019
The two websites, Mobile Phones Direct and Smartphone Company, also attracted 13.6 million visitors last year.
The CEO Steve Caunce said: "This agreement represents a significant step forward in our development strategy for our growing range of electric products online and the addition of new complementary categories that customers want and expect from AO.
"With the 5G services that should be launched in the next two years and since the electrical products we sell become more connected than ever before, entering the mobile phone market is a logical next step for us".
Richard Baxendale, current CEO of Mobile Phones Direct, added: "This new adventure marks an exciting moment for AO and Mobile Phones Direct, creating something that we believe can be a real turning point for the industry."
The acquisition should be completed by March 31, 2019, subject to approval by a shareholder and the competition.
In July, AO World warned that weak consumer demand had affected summer trade in its main markets, despite an increase in sales in the first half of the year.
However, the company generated group revenue of £ 404.2 million in the semester as of September 30, 2018, an increase of 9.9% from the previous year.