Best Buy has reached a deal to acquire mindShift Technologies for $167 million, according to the companies.
Best Buy plans to utilize mindShift's managed services capabilities to fuel growth into its own SMB services business, according to the Minneapolis-based retailer.
"The combination of mindSHIFT's capabilities and Best Buy's points of distribution through its retail, Geek Squad services and Best Buy For Business operations is expected to create a competitive advantage that would provide an opportunity for the two companies to capture greater share within the estimated $40 billion small and mid-sized business MSP market," wrote Best Buy in a statement announcing the release.
Waltham, Mass.-based mindShift is no stranger to acquisitions itself. The company made eight acquisitions from 2008 through early 2011 to become a $100 million MSP and claimed to be the largest MSP in the U.S. covering the SMB market.
In an interview with CRN this June, mindShift CEO Paul Chisholm said he expected consolidation in the MSP market and added, "you need more scale to drive better revenue." The company should have that opportunity now with Best Buy's broad SMB customer base.
Best Buy likened its acquisition of mindShift to its 2002 purchase of GeekSquad in terms of driving growth in its services business.
Best Buy plans to help mindShift expand its vertical-market capabilities in legal, healthcare, financial, non-profits, associations and education markets.
Best Buy plans to give mindShift the "freedom and resources to grow" under its current name and management team, according to the company's statement. The newly acquired company currently has 500 employees with offices in Massachusetts, Long Island, Minneapolis, Morrisville, N.C., Philadelphia and Washington, D.C.
"Fundamentally, we believe we can grow faster with someone like Best Buy than we could do our own and vice versa with them. They felt we had the knowledge of the SMB space and the services that customers want," said Paul Chisholm in an interview Monday with CRN.
While specific details haven't been worked out, it's unlikely that mindShift will have much brand visibility within Best Buy stores. More likely, Best Buy will forward services leads to mindShift that the MSP could not have gotten on its own, Chisholm said.
"The lead generation capability they bring is enormous. They have customers that come into their stores and say ' We like X.' They might provide those services, they might not. We can do a full package to customers. I've always said that small business likes to do business with one stop shop for htem."
MindShift's expertise in the fast-growing cloud space was also a lucrative selling point to Best Buy, Chisholm said. "That's where the world is going and they see us as knowledgeable in that in the SMB space," he said.
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