mindSHIFT Memo Explains Best Buy Deal to Customers
The mindSHIFT executive team, in an apparent email to customers, described Best Buy’s $167 million buyout of mindSHIFT, and the potential synergies from the deal. The memo confirms that mindSHIFT had been seeking “a new investor” for several months. MSPmentor has not directly confirmed the memo’s authenticity. But generally speaking, it looks like the real deal to me. Here’s the memo…
… in its entirety:
Subject: mindSHIFT Announcement
Today marks a historic day in mindSHIFT’s continuing journey to be the premier IT services provider to Small and Medium Businesses (SMBs). Today, we are announcing that mindSHIFT and Best Buy have entered into a definitive agreement for mindSHIFT to become a wholly owned subsidiary of Best Buy. This acquisition means that mindSHIFT will become a Best Buy company. The transaction, which is expected to close at year-end is subject to regulatory and Board approvals.
As you know, your business as well as our legacy private investors fuel mindSHIFT’s growth. These investments have enabled mindSHIFT to become the leader in the managed services arena for small and mid-sized business and within our key vertical areas of focus through the expansion of our product sets and our expertise in the managed services arena. We began a process to seek out a new investor several months ago to continue our growth strategy. During our process it became clear that we were very closely aligned with Best Buy in both corporate vision as well as in our culture of integrity, customer value and results. Throughout this process Best Buy has been emphatic about its commitment as a corporate objective to expand its SMB IT services business, and mindSHIFT will be one of the foundations of this strategy.
The Best Buy family of brands and partnerships collectively generates more than $50 billion in annual revenue. We are all familiar with the Best Buy retail stores, but the Best Buy family includes a number of brands outside of the stores. Best Buy operates around the world as; Audiovisions, Best Buy Mobile, Best Buy for Business, The Carphone Warehouse, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, Pacific Sales, and The Phone House. The two brands that most closely align with mindSHIFT are the Geek Squad and Best Buy for Business. Both of these areas are an integral part of the Best Buy growth strategy to focus on Services and SMBs.
Through the investor process, we demonstrated to Best Buy that we have the most comprehensive IT services portfolio available today to SMBs and a team of employees that are second to none. Best Buy’s brand and existing Services capabilities coupled with mindSHIFT’s capabilities in the SMB space position us to be the premier player in this space and we will continue to set a new standard for the industry.
Best Buy will establish mindSHIFT as a separate subsidiary. This means that we will continue to use the mindSHIFT brand and continue with our present plan for both organic and acquisition growth. The mindSHIFT management team will continue to lead the company and all employees will continue in their present roles. Best Buy values the unique talents, knowledge, expertise and technical skills that mindSHIFT employees possess.
In this transaction mindSHIFT has focused on what is in the best interest of our customers and our employees. For you, our valued customer, it will be business as usual. mindSHIFT will continue to deliver the same services through the same team. In the future, with Best Buy we will expand our portfolio of services to deliver even more value to the Small and Medium Business market. I believe this is the correct next step in mindSHIFT’s growth as the potential benefits of our combination are much greater than we could achieve on our own.
We recognize that this transaction and our growth are not possible without your business. I know I speak for everyone at mindSHIFT as I thank you for your business, the continuing confidence you have in mindSHIFT and the trust you have in us to deliver premier IT Managed Services to you and all of your end users.
I, or your mindSHIFT contact is available to speak with you at any time regarding this transaction.”
Side note: I’m not sure how the memo is being signed as it reaches customer inboxes.
A Closer Look
Read between the lines and it’s clear mindSHIFT’s “legacy investors” were looking for a potential exit strategy. That strategy included hiring a financial advisory firm, The Bank Street Group, as a financial advisor on potential M&A or investor deals.
Also, it’s clear Best Buy sees potential synergies between mindSHIFT, Best Buy Geek Squad and Best Buy for Business. However, the Big Box retailer has to be careful with that strategy. mindSHIFT offers sophisticated cloud and managed services. In my opinion, the mindSHIFT brand could become tarnished if it gets lumped in with consumer break-fix services promoted by Geek Squad.
Still, it’s clear that the mindSHIFT brand and management team will march forward as a focused business, working under the larger Best Buy portfolio.