AO World has announced its acquisition of musicMagpie for nearly £10 million, aiming to enhance its offerings in the mobile and consumer technology sectors. The deal includes a payment of approximately 9.1 pence per share to musicMagpie investors, representing a 58% premium over the company’s closing share price. AO World praised MusicMagpie as a leading player in the second hand electronics market, highlighting its robust technology infrastructure and active customer base.

The acquisition is seen as a strategic move by AO World to mitigate financial risks associated with the increasing trend towards sustainability and repair in the tech industry. The company expects the deal to be finalised in the first quarter of next year and anticipates that it will enhance trade-in options for its customers. musicMagpie’s extensive network of SMARTDrop kiosks across the UK, where customers can exchange old phones for cash, is a key asset in this expansion.

musicMagpie, which joined the AIM market of the London Stock Exchange in April 2021, has previously attracted takeover interest. Its board had concluded that partnering with a financially stronger organisation could provide operational synergies and support its growth strategy. AO World believes that the two companies’ complementary business models, focused on online sales and customer service, will create significant opportunities. AO World has no plans to relocate MusicMagpie’s operations, including its headquarters in Stockport and facilities in the UK and the US, although musicMagpie is currently reviewing its UK head office headcount, with a reduction of about 30 roles anticipated.

Commenting on the acquisition, John Roberts, chief executive and founder of AO, stated that “To achieve our strategic ambition of becoming the destination for electricals, it is crucial for AO to enhance its consumer tech offering. A top-tier trade-in service will be essential, and musicMagpie represents a significant enabler in unlocking value through our reverse supply chain.”

Steve Oliver, musicMagpie co-founder and chief executive,for his part declared that “AO is a highly trusted consumer brand that shares our commitment to providing a first-rate service for customers. I am very proud of the musicMagpie business and the trusted brand that we have created, providing consumers with a smart, sustainable and trusted way to buy, rent and sell refurbished consumer technology and physical media products. We welcome the opportunity to join the AO Group and believe it represents a natural custodian for musicMagpie as part of the next stage of the business’ development.”