mindSHIFT CEO Paul Chisholm talked to the WHIR about his company's acquisition
(WEB HOST INDUSTRY REVIEW) — When a company with more than $50 billion in annual revenue makes a $167 million investment, it may not have a huge impact financially, but strategically, Best Buy’s recent acquisition of web host mindSHIFT has positioned the electronics retail giant to become a one-stop shop for small businesses.
The companies announced the deal on November 7, and so far the reaction from mindSHIFT’s customers and employees has been “very, very positive,” mindSHIFT CEO and chairman Paul Chisholm says in a phone interview with the WHIR.
With the acquisition of mindSHIFT, Chisholm says Best Buy will add more service capability to its small and medium business customer base. He says mindSHIFT will compliment Best Buy’s Geek Squad, a division of the company acquired in 2002 that does primarily “consumer-type IT services.”
“To some degree you could argue they have a consumer brand under the Geek Squad and they’ll have a business brand under mindSHIFT,” Chisholm says.
“I think we found throughout the process from mindSHIFT’s point of view is that Best Buy made it very clear from the beginning that they wanted to run us as a separate subsidiary because we’re not a retail organization, we’re not going to be integrated into a retail company,” Chisholm says. “We’re going to be a separate subsidiary who’s helping really fuel one of the foundations of their future growth.”
The whole process began in late spring 2011, according to Chisholm, while mindSHIFT was looking for an investor to fuel its growth plans.
According to Chisholm, mindSHIFT hired a banker to talk to the companies that were interested. After a couple of months, seven or eight people were really interested, he says, and only five or six submitted a bid. He says the deal became very serious towards late August, and then the due diligence process went on until October.
“It really started out as adding an investor and then we had really two choices: some people wanted to buy into the company, only x percent of the company, let’s just say 20 or 30 percent,” Chisholm says. “Other companies like Best Buy thought they would prefer to own 100 percent of the company. We finally made a decision that was a) a good financial decision and b) good for employees.”
Throughout the interview, Chisholm stresses his employees’ well-being as a serious consideration of the acquisition. With 500 employees, he wanted to ensure that there would be opportunity for each of them moving forward as part of Best Buy.
Overall, Chisholm says the acquisition has secured a financial future for mindSHIFT to fund the next stage of growth and will help accelerate that growth through lead generation across the country. Another key advantage, according to Chisholm, is hardware procurement. As part of Best Buy, mindSHIFT should have better pricing on hardware and this will benefit its customers as well.
“There are certainly opportunities for us to work with them in a lot of different ways to develop new products and new services,” Chisholm says. One of these ways, is in developing smartphone solutions. Best Buy is one of the largest suppliers of mobile phones and smart phones and this will help mindSHIFT learn what the end-user wants, Chisholm says.
“We can teach them a lot about the business consumer, they can teach us a lot about the end-user consumer and maybe someday there will be some joint offerings we develop but that’s down the road to be honest with you,” he says.
“This gives us the opportunity to redefine this industry a little bit because I think there’s so much capability we have and they have,” he says. “Hopefully we’ll do it right and execute it properly and we can bring a lot of advantages to this industry.”
For now, mindSHIFT will continue offering cloud, virtual and managed services. Chisholm says there won’t be any changes for employees or customers as it is still the owner of the contracts, and will live up to the commitments it has made.
“What every customer wants to hear is, I’m going to deal with the same people, the same people run the company, the mindSHIFT brand stays, and all that’s true,” he says.
About Nicole Henderson
Nicole Henderson writes full-time for the Web Host Industry Review where she covers daily news and features online, as well as in print. She has a bachelor of journalism from Ryerson University in Toronto, and has been writing for the WHIR since September 2010. You can find her on Twitter @NicoleHenderson.
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