JB Hi-Fi seals deal for The Good Guys

good guysJB Hi-Fi has today confirmed it’s acquisition of whitegoods retailer, The Good Guys, in a deal worth $870 million.

Both brands will continue to operate as independent brands and retain their own consumer propositions and price promises.

Michael Ford will remain CEO of The Good Guys, reporting to Richard Murray, and The Good Guys Support Centre will remain based at Essendon Fields.

JB Hi-Fi’s footprint will increase to a combined 295 stores in Australia and New Zealand.

“The acquisition is a very attractive strategic opportunity for JB Hi-Fi since The Good Guys is a highly complementary business which is aligned with our management philosophy and significantly enhances our offering in the $4.6 billion home appliances market,” said Richard Murray, CEO, JB Hi-Fi.

“Joining forces with JB Hi-Fi makes enormous sense from every standpoint,” said Andrew Muir, executive chairman, The Good Guys. “We are bringing together two iconic Australian retail brands that both have tremendously strong and loyal customer bases. The Good Guys’ position and track record in home appliances is matched by JB Hi-Fi’s strength in consumer electronics and entertainment.”

“Bringing these brands under common ownership will combine the skill and expertise of two of Australia’s most respected retailers. The combined company will have the scale and resources to realise the growth aspirations and potential of both brands.”

JB Hi-Fi’s footprint will increase to a combined 295 stores in Australia and New Zealand.

“The acquisition is a very attractive strategic opportunity for JB Hi-Fi since The Good Guys is a highly complementary business which is aligned with our management philosophy and significantly enhances our offering in the $4.6 billion home appliances market,” said Richard Murray, CEO, JB Hi-Fi.

The electronics retailer’s management expects the takeover to yield net synergies of $15-20 million per annum.

The deal will be funded through a combination involving the proceeds of $394 million raised from the entitlement offer and existing debt facilities plus a new $450 million multi-tranche acquisition debt facility.

“This is a fantastic opportunity for The Good Guys,” said Michael Ford.

“We will preserve the things that have made The Good Guys great, and by combining with JB Hi-Fi, we will have the scale and resources to grow the brand and realise its full potential.

“I’m excited to be leading The Good Guys into this next phase of growth. The future for The Good Guys has never looked brighter and I have enormous confidence in our collective success.”

JB Hi-Fi shares are in a trading halt.

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