Best Buy Co., Inc., the largest U.S. retailer of technology and entertainment products, has agreed to acquire Future Shop, the largest Canadian retailer of consumer electronics, for $580 million (CDN) or approximately $377 million (U.S.)."This acquisition accelerates by several years our goal of becoming North America's premier retailer and eventually the leading global retailer of technology and entertainment products and services," states Best Buy founder, chairman & CEO Richard M. Schulze. "Future Shop currently operates 88 stores throughout Canada and is the nation's number one retailer of consumer electronics. We plan to grow Future Shop's revenues, store count and employee base."
Best Buy has agreed to tender an offer of cash for Future Shop stock in the amount of Canadian $17.00 per share or approximately U.S. $11.05 per share. The Company expects the acquisition to be accretive to earnings in the current fiscal year, adding 1-2 cents per share.
"Given this transaction and the strength of our underlying businesses, we continue to anticipate that we will meet or exceed analysts' expectations for our second quarter and fiscal year earnings," Schulze adds.
Hassan Khosrowshahi, chairman and CEO of Future Shop, states, "Best Buy's financial strength, reputation, and retailing expertise is a winning combination for our employees, shareholders and customers. Shareholders receive an attractive price, customers will continue to see the newest technology, and our employees will benefit from Future Shop's continued growth as part of a global company. Our board of directors unanimously supports this transaction."
Burnaby, B.C.-based Future Shop will operate as a separate Canadian subsidiary of Best Buy Co., Inc. The transaction is scheduled to close late September 2001, subject to regulatory approvals. Upon the close, Khosrowshahi - who founded Future Shop in 1982 -- plans to relinquish his role as chairman and CEO. Kevin Layden, president and COO of Future Shop, is to continue as president of Future Shop, reporting to Brad Anderson, vice chairman of Best Buy. Layden spent 17 years with Circuit City Stores Inc. before joining Future Shop in 1997. He was promoted to president and COO of Future Shop in 1999.
Thomas Healy, formerly president of Best Buy Canada, becomes president of Best Buy International, reporting to Anderson, responsible for Best Buy's ongoing international expansion efforts. Healy joined Best Buy in 1990, led the Company's successful expansion into the Midwest, East and Southeast, and began work on its Canadian expansion last year.
Link for more info: www.BestBuy.com
