AO World bolsters mobile offering with website acquisition

AO World has agreed to buy online-only phone retailer Mobile Phones Direct in a “game-changer” acquisition that will expand its mobile offering in time for the introduction of 5G.

The £32.5 million takeover will increase AO World’s mobile offering, which is currently limited to handsets only.

Chief executive Steve Caunce said: “This deal represents a significant step forward in our strategy of developing our growing range of online electricals and adding new complementary categories that customers want and expect from AO.”

He added that the deal would position the company to take advantage of the rollout of 5G over the next two years.

Meanwhile, Richard Baxendale, current chief executive of Mobile Phones Direct said: “This new venture marks an exciting moment for both AO and Mobile Phones Direct, creating something that we believe will be a real game changer for the industry.”

Last year Mobile Phones Direct and sister site Smart Phone Company pulled in 13.6 million visitors between them.

The business generated £121.7 million in revenue for the year ended March 31 and underlying earnings of £5.5 million.

The acquisition is expected to be completed in the first quarter of 2019, subject to shareholder and competition watchdog approval.

AO World warned in July that weaker consumer demand had impacted summer trading in its core markets, despite a rise in sales earlier in the year.