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After running on its own steam for over a decade, Speakeasy is picked up by a major corporation.
Best Buy acquires Speakeasy in $97 million deal
By Tricia Duryee
Speakeasy, which provides broadband Internet access and voice services to small businesses, is being acquired by mega-retailer Best Buy for $97 million in cash.
The Seattle-based Speakeasy will operate as a wholly owned company under Best Buy for Business, the retailer’s small business division. All of Speakeasy’s 300 employees will keep their jobs.
Speakeasy started off 1994 as an Internet café in downtown Seattle, but grew into a nationwide broadband provider as the Internet industry grew. In its 11 ½ years of business, the company raised a total of $50 million in venture capital.
As recently as the end of last year, the privately held Speakeasy became profitable, earning income before some expenses. It serves 46,000 broadband voice users.
Bruce Chatterley, Speakeasy’s chief executive said Best Buy has done a good job of identifying which customers are coming into stores and one of biggest segments is small business.
“That segment has grown pretty dramatically over the last three years, and as they looked at growth prospects, communications is at the centerpiece of what small businesses are all about,” he said. “That’s the genesis of the relationship. With the acquisition of Speakeasy, communications is at the centerpiece of their strategy, and we have the opportunity to thrive and grow in a complex environment.”
Chatterley said late last year, Speakeasy started formally looking at a possible sale after several independent communications companies across the country had been acquired.
Best Buy, based in Richfield, Minn., emerged as an acquirer. Chatterley said one of the aspects Best Buy really found appealing was Speakeasy’s relationships with 4,700 independent IT consultants.
“For small businesses and tech-savvy professionals, Speakeasy offers innovative IT and communications services, backed by outstanding network reliability and terrific customer support,” Darren Jackson, Best Buy executive vice president and chief financial officer, said in a press release. “We understand the small business customer and know that managing multiple service providers can be challenging. With Speakeasy in our portfolio, we are better equipped to provide our small business customers with one-stop shopping for all of their technology needs.”
Chatterley said that Speakeasy will also gain from the acquisition by getting access to more capital, retail stores and a strong brand.
“It will be business as usual, but what you’ll see is growth at an accelerated pace,” he said. “We expect this thing to be a launch pad. I think it will be great.”