Dixons sells stake in store chain to Cellnet
Cellnet will pay Dixons an initial pounds 25m with further cash payments of up to pounds 32m depending on performance.
There are 87 branches of The Link, mainly in the South-east of England. With the additional funds Dixons hopes to extend the network to 200 branches across the country within three years, creating 750 jobs.
Commenting on the deal, Cellnet said: "We've been very pleased with the strong growth in Cellnet connections through The Link stores. We like the format and would like to see more."
Dixons said it was pleased with the price for a three-year-old business which made a pounds 2.9m loss last year. Finance director Ian Livingston also said the sharing of investment would aid faster roll-out of the stores with lower risk.
Dixons stressed that the Cellnet deal would not alter its unbiased sales stance and that its stores would continue to sell the Orange and One-2- One networks as well. "Dixons has complete management management control and we will continue to offer unbiased advice and will train staff accordingly," Mr Livingston said.
The Link specialises in the sale of mobile phones, fixed-line telephones, faxes, pagers and personal organisers as well as a range of BT services. It made a pre-tax loss of pounds 2.9m last year on sales of pounds 21m. It is expected to make a profit this year on a substantially higher sales figure. Net assets at 27 April last year were pounds 7.5m.
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