AO World has agreed to acquire the online second-hand retailer musicMagpie in a deal worth an estimated £10m.

The move is part of an effort by the AO board to expand its mobile and consumer technology offering.

Under the terms of the deal, each musicMagpie shareholder will be entitled to receive 9.07 pence in cash per share, valuing the entire issued and to be issued share capital of musicMagpie at approximately £9.98m on a fully diluted basis.

In a statement, AO said it believes the acquisition, which will be implemented by way of a court-sanctioned scheme of arrangement, can “augment its capability and value capture” in the mobile and consumer technology categories.

“To achieve our strategic ambition of becoming the destination for electricals, it is crucial for AO to enhance its consumer tech offering,” CEO of AO, John Roberts, commented.

“A top-tier trade-in service will be essential, and musicMagpie represents a significant enabler in unlocking value through our reverse supply chain.

“Moreover, musicMagpie stands to leverage our existing supply channels, which could lower its cost of acquisition and allow us to scale refurbished technology with operational precision.”

musicMagpie CEO and co-founder, Steve Oliver, added: “I am very proud of the musicMagpie business and the trusted brand that we have created, providing consumers with a smart, sustainable and trusted way to buy, rent and sell refurbished consumer technology and physical media products.

“We welcome the opportunity to join the AO Group and believe it represents a natural custodian for musicMagpie as part of the next stage of the business' development.”

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