Published on 14/09/2016 by Punchmedia

JB to Acquire The Good Guys Business for $870 Million

Electronics giant JB Hi-Fi has reached an agreement to buy appliances retail business The Good Guys for $870 million.

The acquisition will make JB Hi-Fi Australia's leading whitegoods and appliances retailer, with a 29 per cent share of the $4.6 billion home appliances market, ahead of Harvey Norman's 24 per cent share.

It will also cement JB Hi-Fi's position as the market leader in consumer electronics, lifting its share from 19 per cent to 24 per cent.
The deal is expected to boost JB Hi-Fi's annual sales by $2.1 billion to more than $6 billion and increase its store footprint by 101 stores to 295.

The sale of the business follows several years of negotiations between JB Hi-Fi and The Good Guys owner Andrew Muir, whose father founded the business in 1952 as Mighty Muirs.

The Macquarie Capital-advised JB Hi-Fi and The Good Guys finally reached agreement this week after Mr Muir abandoned plans for a $1 billion initial public offer.

JB Hi-Fi plans to retain The Good Guys brand and head office and run a dual-branded strategy to smooth the integration process and avoid losing market share.

JB has no plans to close stores, even though in some areas JB Hi-Fi and The Good Guys stores trade in close proximity. Rather, it supports The Good Guys strategy to open 4 to 5 stores a year and plans to continue to open between 6 and 7 JB Hi-Fi stores a year.

The company also plans to retain its existing JB Hi-Fi Home strategy and has no plans to shift home appliances out of existing stores into Good Guys stores.

Once the acquisition is completed in November, JB Hi-Fi will derive 26 per cent of revenues from home appliances and 65 per cent from electronics.

Domestic appliance retailing revenue in Australia is expected to increase at an annualised 2.0% over the five years through 2016-17, to $13.5 billion.

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Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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