Best Buy Acquires GreatCall for $800 Million to Address Growing Needs of Over 50 Million Seniors

Best Buy is the No. 1 consumer electronics retailer in the United States, with more than 1,150 stores worldwide and over 100 “Best Buy Express” unstaffed, self-service kiosks located in U.S. airports and shopping malls. It currently operates branches in Mexico and Canada. The company previously had operations in China and Europe but exited those markets in 2011 and 2012, respectively.

GreatCall, founded in 2006 and headquartered in San Diego, California, currently serves over 900,000 paying subscribers. The company provides health and safety products for seniors, integrating their healthcare services through a suite of offerings that includes mobile devices, mobile services, mobile applications, and wearable devices. Its flagship product is the Jitterbug phone, specifically designed for older adults. The device features Live Nurse (emergency care) and, in partnership with FONEMED, delivers 24/7 access to registered nurses for its customers.

For instance, the Jitterbug Touch 3 smartphone is equipped with health and safety applications that connect users to doctors and nurses for 24/7 medical advice.

Jitterbug Touch 3 Smartphone

The company provides nationwide cellular services as a mobile virtual network operator (MVNO) over the Verizon Wireless network, helping older adults live independently with greater safety, offering safety monitoring for family caregivers, and reducing healthcare costs.

Best Buy CEO Hubert Joly explained, “Technology can improve the quality of life for an aging population,” positioning Best Buy as leveraging “our expertise in technology and our ability to serve customers in their homes.”

This acquisition embodies Best Buy’s “Strategy 2020,” which aims to enrich lives through technology by addressing essential human needs. The strategy focuses on meeting the growing demands of an aging population with the aid of technological products, services, and solutions. Health care represents a vast and rapidly expanding market where technology can help specifically address the needs of older consumers and their caregivers.

Best Buy sees an opportunity in catering to the aging baby boomer generation. Currently, there are approximately 50 million Americans aged 65 and older, a figure projected to increase by more than 50% over the next two decades, representing a massive market.

In addition to its consumer electronics retail business, Best Buy is increasingly expanding its sales of health and wellness-related products. It has also recently invested in health-related initiatives targeting the aging population, which include participation from some of the nation’s leading healthcare providers and insurers.

The acquisition of GreatCall will strengthen Best Buy’s existing initiatives in the health sector, help deliver compelling solutions to more customers, and drive further growth for Best Buy in both consumer and business markets.

GreatCall CEO David Inns stated, “Since GreatCall’s launch, we have been committed to providing the best technology and services for the aging population, offering peace of mind to seniors and their families. We provide appropriate technology and support to help older adults stay safe and improve their quality of life. We are thrilled to partner with Best Buy to serve a larger segment of the aging population.”

GreatCall is already a growing, profitable enterprise with annual revenues exceeding $300 million. By combining GreatCall’s more than 900,000 paying subscribers with Best Buy’s global network of over 1,150 stores, the partnership could deliver higher-quality services to the elderly population. David Inns stated, “Integrating our products, services, and expertise with Best Buy’s customer focus and scale will meaningfully expand GreatCall’s business reach.”

“We know that technology can improve the quality of life for the aging population and those who care for them,” said Hubert Joly, Chairman and CEO of Best Buy. “Now, we have a significant opportunity to meet these customers’ needs by combining GreatCall’s expertise with Best Buy’s unique marketing, sales, and service capabilities. We look forward to working closely with David and his management team, and we are excited about the opportunities in the health sector and the advantages we can bring to this space, particularly our experience in technology and our ability to serve customers in their homes.”

GreatCall will maintain its San Diego headquarters, as well as its care centers in Carlsbad, California, and Reno, Nevada. Inns, who has worked with GreatCall since its founding in 2006, will continue to serve as CEO.

The transaction is subject to regulatory approval and other customary closing conditions, and is expected to be completed by the end of Best Buy’s third quarter of fiscal 2019. The company expects the acquisition to have a neutral impact on its non-GAAP* earnings in fiscal 2019 and fiscal 2020, and to become accretive in fiscal 2021.

This acquisition aligns with Best Buy’s long-term capital allocation strategy, which prioritizes funding for operations and growth investments, including acquisitions. The company then returns remaining excess free cash flow to shareholders through dividends and share repurchases, while maintaining investment-grade credit metrics. This acquisition is not expected to affect Best Buy’s dividend policy or its previously announced plan to spend $1.5 billion on share repurchases in fiscal 2019. As scheduled, Best Buy plans to release its financial results for the second quarter of fiscal 2019 before the market opens on August 28, 2018.