UK/USA. WHSmith today announced the signing of an agreement to acquire InMotion for US$198 million. InMotion is a leading retailer of digital accessories in US airports.
The UK news, books and convenience retailer said that the transaction marks a significant step in its international travel growth strategy. The deal doubles the size of WHSmith’s already burgeoning international travel business.
“InMotion is a highly successful pure play travel retailer in the world’s largest travel retail market.” – WHSmith Group Chief Executive Stephen Clarke
Completion of the transaction, which is subject to customary closing conditions including US regulatory approval, is expected by year-end.
WHSmith said that InMotion is a strongly performing business in a category with attractive growth prospects. The deal offers a platform from which to expand WHSmith’s international travel business into the world’s largest travel retail market, the company added.
The acquisition also presents opportunities to grow the digital accessories format in key markets outside North America, complementing WHSmith’s recent success internationally, the company said.
InMotion will continue to operate as a standalone business within WHSmith’s international travel business. InMotion’s senior management team will continue to lead the business, including Jeremy Smith, who has been CEO for 12 years.
WHSmith Group Chief Executive Stephen Clarke said: “InMotion is a highly successful pure play travel retailer in the world’s largest travel retail market. The acquisition of InMotion is an exciting value creation opportunity for the WHSmith Group and marks a major step in our international travel retail growth strategy.
“It doubles the size of our international travel business and provides us with attractive growth opportunities. The travel retail market in North America for digital accessories offers significant growth potential. As the market leader, recognised for its best-in-class customer service, InMotion is well positioned to take advantage of that potential.
“In addition, InMotion provides us with a scalable platform to launch the WHSmith airport format into the US, the world’s largest travel retail market for news, books and convenience products. Finally, building on our recent successes in the digital accessories category in the UK and on InMotion’s supplier relationships and experience, we see significant potential to accelerate growth outside of the US using the InMotion format.
“InMotion is run by a very experienced senior management team and we look forward to working with the CEO, Jeremy Smith, and his team to further develop both businesses across North America and other territories.”
InMotion President & CEO Jeremy Smith said: “The team at InMotion are delighted to be joining such an iconic business with a high-growth international division. Working together, we look forward to combining our expertise in travel retail to grow the InMotion business further both within and outside of the US, while at the same time accelerating WH Smith’s international growth strategy.”
InMotion is the largest airport-based digital accessories retailer in North America. Established in 1998, it operates a concession portfolio of 114 stores across 43 airports in the USA, with a presence in nine of the top ten and 22 of the top 25 busiest.
InMotion sells a range of digital accessories, which includes premium headphones and earbuds, travel accessories, mobile power, portable speakers and action cameras. In the calendar year to date, InMotion has delivered like-for-like sales growth of +13%, following like-for-like growth of +12% in calendar year 2017. For the financial year ending 31 December 2018, InMotion is expected to deliver sales of approximately US$166 million and EBITDA of approximately US$23 million.
“Consistent with WHSmith’s strategic priorities”
WHSmith said that its travel business has delivered over ten consecutive years of profit growth and now generates two thirds of group operating profit. This growth has come from three areas, it noted: evolving store formats and category mix in the UK, with digital and travel accessories being a key part of this growth; opening new stores in the UK; and expanding into new markets offshore.
“International travel forms a key part of the group’s future growth and value creation opportunity and InMotion has been identified as a very attractive acquisition in this context,” the company noted.