Best Buy Latest Giant Retailer Diving Into Health Care Business

With an eye on the demands generated by an aging population, it plans to buy GreatCall, a supplier of health care services for the elderly.

Best Buy, the leading consumer electronics business, is the latest retailer to jump into health care, announcing yesterday that it plans to purchase health services provider GreatCall for $800 million. 

It’s Best Buy’s largest acquisition ever and, Reuters reports, it’s being done with an eye toward demand for the sort of services GreatCall provides to the elderly, a demand that should only increase as the population of the United States ages. 

Best Buy’s move comes in the wake of similar undertakings by other major retailers. Last year CVS announced that it wants to buy Aetna for $69 billion, and that appears to be almost a done deal. Walmart wants to buy Humana, a deal that would be the biggest acquisition for that retailer, inasmuch as Humana is worth about for $40 billion. 

As the Wall Street Journal reported, “Should there be a [Walmart-Humana] deal—and should regulators and shareholders bless it—it would transform Walmart overnight into one of the nation’s largest health insurers. It would immerse the company in a complicated industry, one that continues to evolve eight years after the Affordable Care Act was enacted and as Washington remains deeply divided over health-care policy.”

The Best Buy-GreatCall transaction is expected to be completed by the third quarter of 2019. Best Buy officials plan to make GreatCall a separate division that will be run by David Inns, GreatCall’s current CEO.

GreatCall, a privately held company founded in 2006, sells products that allow the elderly to quickly and easily contact emergency response personnel. It has over 900,000 subscribers and has annual revenue of about $300 million, according to Reuters.

Retail analyst Charlie O’Shea of Moody’s tells Reuters that this is a long-term investment for Best Buy, and short-term profitability will be icing on the cake. “The $800 million price tag can easily be covered out of existing cash balances and operating cash flow,” he tells Reuters.