AO has agreed a deal to acquire fellow listed North West electronics retailer musicMagpie.
musicMagpie’s directors have recommended the offer of 9.07 pence in cash per share to its shareholders and claim to have secured the backing of investors representing 54% of the entire issued share capital already.
The deal values Stockport-headquartered ‘recommerce’ firm musicMagpie at just under £10 million, a fraction of its market capitalisation at IPO in 2021. It floated with a share price of 193p, representing a market cap of £208m.
The offer represents a premium of approximately 58% to the closing price of 5.75p per share on 1st October. musicMagpie’s present market cap is under £6.5m.
Should shareholders vote in favour of the acquisition, it is expected to complete in Q1 2025.
Bolton-headquartered AO sells white goods online while musicMagpie, led by co-founder Steve Oliver (pictured), sells reconditioned second-hand electronics and allows people to trade in their devices such as mobile phones.
“To achieve our strategic ambition of becoming the destination for electricals, it is crucial for AO to enhance its consumer tech offering,” said John Roberts, chief executive officer of AO.
“A top-tier trade-in service will be essential, and musicMagpie represents a significant enabler in unlocking value through our reverse supply chain.
“Moreover, musicMagpie stands to leverage our existing supply channels, which could lower its cost of acquisition and allow us to scale refurbished technology with operational precision.
“musicMagpie’s commitment to customer satisfaction and its exceptional brand are closely aligned with our values, and our shared cultures create a strong foundation for collaboration.
“I am excited to welcome Steve and the musicMagpie team into the AO family and to realise the potential that our combined efforts can unlock.”
Oliver commented: “AO is a highly trusted consumer brand that shares our commitment to providing a first-rate service for customers.
“I am very proud of the musicMagpie business and the trusted brand that we have created, providing consumers with a smart, sustainable and trusted way to buy, rent and sell refurbished consumer technology and physical media products.
“We welcome the opportunity to join the AO Group and believe it represents a natural custodian for musicMagpie as part of the next stage of the business’ development.”