If there’s one trend that continues to define the technology and smartphone markets, its the rise of acquisitions and mergers. In fact, tech companies announced $500 billion worth of transactions during 2016 alone, ranking this as the second-highest annual total since the year 2000.
This trend has been continued recently in the smartphone space, with Clive Bayley’s Fonehouse and Metrophone websites having recently been acquired by a new venture (KTM Online Ltd).
We’ll look more closely at this acquisition in the post below, and ask what it means for all parties involved.
What does the deal involve?
The Fonehouse brand, which was founded by Bayley back in 1994, was clearly the main focus of the acquisition and final purchase. The sale also included the Fonehouse and Metrophone websites, along with the additional 21 franchises that make up the company’s Retail Partner Programme.
The brand behind the acquisition is KTM Online; a newly-formed venture that is backed by considerable expertise within the sector. In fact, the team behind KTM Online are renowned for building two of the mobile industry’s fastest growing businesses during the last five years, namely GreenTech Distribution and Mobile Phones Direct.
For Fonehouse pioneer Bayley, the acquisition makes perfect sense and while crucially enable all parties to benefit considerably. “This is a positive move that will enable a stronger company going forward,” he said in a statement. “Not only will the Fonehouse brand benefit from industry-leading expertise in online retailing and access to a broader range of products and product offers, but it will also enjoy the financial backing of its new owners.”
Bayley also confirmed that employees, stakeholders and retail partners had been informed about the acquisition, while no job losses will result from the sale.
What about the buyers?
From the perspective of former Mobile Phones Direct pair Ben Branson and Simon Weedon (who worked as the CEO and Online Marketing Director respectively), the deal also makes perfect sense. After all, this pair boast a huge depth of experience and expertise in the online retailing sector, so they’re well placed to empower one of the market’s most successful distributors while furthering their own empire.
“The online market is incredibly competitive, so to partner with one of the most successful distributors out there is an amazing opportunity,” said Ben. “In a constantly changing market and commercially competitive environment, this really is a deal that works for everyone.”
With GreenTech also offering outstanding buying power and access to brand new products, KTM Online will also be able to add value to the Fonehouse brand while leveraging its existing foundation to reach a huge target market. This makes for a relatively complex and lucrative deal, and one that will offer considerable benefit to everyone involved.
The bottom line
While not all acquisitions work out, this is one that has the potential to be hugely impactful. The main reason for this is that all parties are adding tangible value to the deal, from GreenTech’s resources and KTM’s expertise to the existing reach of the Fonehouse brand.
This is definitely a space to watch in the near-term, but we expect to see the Fonehouse business grow and diversify at a considerable rate on the back of this acquisition.