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November 7, 2011

MW Spotlight

Best Buy (NYSE:BBY) to acquire mindSHIFT Technologies, Inc. for $167M  

Martin Wolf Analysis
  • mindSHIFT, with revenues in the $100M range after eight roll-up acquisitions, will be operated as a subsidiary of Best Buy, relying on the lead generation Best Buy can provide as a one stop shop for small and medium businesses (SMB).
  • The acquisition will allow Best Buy to further grow its IT services to SMB via its retail stores, Geek Squad services, and Best Buy for Business operations. However, the challenge will be to convey the message to SMB customers that the consumer products company now offers higher end value-added IT services.
  • Best Buy's traditional product resale business model has been challenged by low cost retailers such as Walmart and online retailers such as As a result, it is responding by embracing services as the key to its new model, where those competitors are weak.
  • BBY closed down 3.11% today, whereas the Nasdaq closed up 0.34%. This indicates that shareholders acknowledge that their core business is facing challenges.
  • The acquisition is yet another deal in the MSP and cloud space where IT services companies have been entering the market (i.e: TWC, TDS, CenturyLink, Verizon).
  • Staples made a similar IT services play in 2006 with the acquisition of Thrive Networks. Thrive has been run as a subsidiary and has not been significantly consolidated into Staples' retail business model.
  • Martin Wolf expects continued consolidation in the managed services and cloud space as competitors try to build scale.

Press Release:

Please click here to read the press release.  


Martin Wolf was not the adviser of this transaction. To learn more about this transaction or our firm, contact Yousif Abudra at or (925) 215-2760.   

About Martin Wolf  


Based in Silicon Valley, Martin Wolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 100 transactions in six countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. Martin Wolf is member of FINRA and SIPC. For more information, visit


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