It’s been nearly six months since consumer electronics chain retailer Best Buy Co. Inc. closed its nearly $1 billion acquisition of GreatCall, a San Diego provider of cell phone and related digital home healthcare services to seniors.
Best Buy acquired GreatCall to help the retailer provide more digital health services to the homes of seniors. GreatCall estimates this to be a $9 billion market.
On Best Buy’s recent year-end earnings call, CEO Hubert Joly presented more detail on Best Buy’s emerging healthcare ecommerce strategy—and a few hints on where the business is heading.
Best Buy closed its $738 million acquisition of GreatCall in October and since then has spent an additional $13 million on related costs for completing the deal, according to Best Buy’s recently filed annual report with the U.S. Securities and Exchange Commission. In December, Best Buy appointed Asheesh Saksena as president of Best Buy Health. He will be tasked with “implementing our health strategy, with particular focus on ways to use technology and our in-home capabilities to help seniors live independently in their homes,” Best Buy says.
With the close of the acquisition and the appointment of an overall healthcare ecommerce market, Best Buy is now well-positioned to make an even bigger run at the market for digital health services to the homes of seniors. GreatCall estimates this to be a $9 billion market.
“In health, we acquired a leading connected health services provider for aging consumers GreatCall and took a tangible step forward in our strategy to have seniors live longer in their homes with the help of technology,” Joly told analysts based on a transcript from SeekingAlpha.com. Since we acquired the company in October, the integration has been seamless and the value creation opportunities we envision have begun to materialize.”
One area where Best Buy is looking to grow GreatCall, which prior to the acquisition generated annual revenue of about $300 million, is working with more healthcare insurers. “As children of aging parents, many of us would appreciate the potential power of our health-monitoring service that enables seniors to live longer in their homes, while reducing related healthcare costs,” he told analysts. “We’re currently in pilots with a number of managed care organizations—over time, we believe this could become a material growth opportunity for us.”
Best Buy also sees its acquisition of GreatCall as one aspect of a broader strategy to develop and sell digital products and services to homeowners. We like the continued rate of technology innovation and the capabilities technology can bring to people’s lives,” Joly told analysts. “We particularly like the opportunities we have in the connected house space following the acquisition of GreatCall.”
Best Buy didn’t break out any GreatCall operating and business metrics in its annual report or on its fourth quarter earnings call. For now, Best Buy is concentrating on figuring new ways to grow its GreatCall business, chief financial officer Corrie Berry told analysts. “We clearly spent almost $1 billion last year on our GreatCall acquisition and so very in line with our capital allocation strategy. We’ve always said, we’re first going to invest in the business either to fund operations or through acquisition.”
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