Best Buy Doled Out $400M for RPM Provider Current Health
In its latest earnings call, Best Buy leaders not only disclosed the amount the company paid to buy Current Health, but also outlined its three-pronged healthcare strategy, which includes virtual care.
Best Buy's acquisition of remote care services provider Current Health made headlines back in October, and now the company's leaders have revealed the large price-tag behind the deal: $400 million.
In its third quarter 2022 earnings call last week, Matt Bilunas, Best Buy's chief financial officer, disclosed the amount the company paid to purchase Current Health and said the acquisition is expected to have "a slightly negative impact on our Q4 non-GAAP operating income," according to a transcript released by Seeking Alpha.
The retailer announced plans to buy Current Health last month. Current Health's platform integrates patient-reported data with information from biosensors, including the company's own continuous monitoring wearable device, to provide real-time insights into a patient's condition. This allows healthcare organizations to monitor patients remotely and coordinate in-home care through its service partners.
"The future of consumer technology is directly connected to the future of healthcare," said Deborah Di Sanzo, president of Best Buy Health, in an Oct. 12 news release. "We have the distinct expertise in helping customers make technology work for them directly in their homes and by combining Current Health's remote care management platform with our existing health products and services, we can create a holistic care ecosystem that shows up for someone across all of their healthcare needs."
Best Buy has been growing its presence in the healthcare space steadily over the past few years. In 2017, the retailer launched Assured Living, a remote patient monitoring service for seniors. Within the next two years, the company completed two healthcare-related acquisitions: Critical Signal Technologies, a developer of personal emergency response systems and connected health monitoring services for at-home seniors and GreatCall, a connected health platform that helps coordinate care management for seniors.
In its most recent earnings call, which details results for the 13-week quarter ended Oct. 30, Best Buy outlined its healthcare strategy, which focuses on three main areas.
The first is a consumer health category for customers who want to be healthier, including through active monitoring of a chronic condition. The second area is active aging, which includes device-based emergency response services. And the third is virtual care, that is, enabling patients to connect with healthcare providers from their homes.
But company leaders appeared cautious about the timeline for scaling its virtual care offerings.
"To be clear, even though the healthcare industry is evolving quickly, in many ways as a result of the pandemic impacts, it adopts new ways of doing things at a much slower pace than other industries like retail," said Corie Barry, CEO of Best Buy, during the earnings call. "Virtual care is a truly nascent space with significant opportunity, but it will take time and investment to develop our offerings and scale."
Overall, Best Buy's Q3 2022 financial results are mixed. The company's domestic revenue totaled $10.99 billion, a 1.2 percent increase from the same period last year. The increase was primarily driven by sales growth of 2 percent, which was partially offset by the loss of revenue from permanent store closures.
On the other hand, international revenue decreased 7.8 percent from about $1 billion during the same quarter last year to $925 million this year.