CHICAGO Best Buy Co. Inc. (BBY.N) said on Tuesday it would buy Speakeasy Inc., an independent broadband voice, data and IT services provider, for about $97 million to strengthen its small business technology portfolio.
Best Buy, the top U.S. consumer electronics retail chain, expects to close the acquisition in the first quarter of fiscal 2008 and said the deal should not affect fiscal 2008 earnings.
Speakeasy will operate as a wholly-owned subsidiary of Best Buy and deliver its services through the Best Buy For Business unit, which serves small businesses.
Best Buy said the purchase price represents about 1.2 times Speakeasy's calendar 2006 revenue of $80 million.
Speakeasy got its start in Seattle as one of the first U.S. Internet cafes in 1994. Since then, it has transformed into a voice and data services provider aimed at small businesses. Speakeasy, which has about 300 employees, had more than 40,000 customers in 2006, Best Buy said.
Best Buy said the entire Speakeasy executive team will stay with the company. Bruce Chatterley, Speakeasy's CEO, plans to continue in his role and will report to David Hemler, a Best Buy vice president who oversees Best Buy For Business.
Robins, Kaplan, Miller & Ciresi LLP acted as legal adviser to Best Buy in the deal. Blue Beacon Capital LLC served as Speakeasy's financial adviser, and Kirkpatrick & Lockhart Preston Gates Ellis LLP acted as Speakeasy's legal adviser, Best Buy said.