JB Hi-Fi to Buy Good Guys Electronics Chain for A$870 Millionby
Deal adds more than 100 Australian consumer electronics stores
JB Hi-Fi to raise A$394 million to help fund acquisition
JB Hi-Fi Ltd. agreed to buy The Good Guys for A$870 million ($658 million) in cash to add more than 100 consumer electronics stores across Australia.
JB Hi-Fi will fund the acquisition with a new A$450 million debt facility and a A$394 million capital raising, it said in a stock exchange filing Tuesday. Investors will be offered one new JB Hi-Fi share for every 6.6 they own, at a price of A$26.20. JB Hi-Fi closed Monday at A$28.85.
The deal will swell the group’s footprint to 295 stores in Australia and New Zealand. Annual savings from the combination should be as much as A$20 million after three years, according to JB Hi-Fi, which has a market value of A$2.86 billion.
“The acquisition is a very attractive strategic opportunity,” JB Hi-Fi Chief Executive Officer Richard Murray said in the statement. “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.”