TWP gains. – Joining forces with its biggest competitor will give Mobile Defenders LLC An opportunity to become a part of the dominant player in the wholesale mobile parts market with increasing economies of scale.
Mobile Defenders co-founder, president and CEO Jordan Nuttenbaum reached out to Virginia-based MobileSentrix in February to see if the company was interested in a potential acquisition.
“We’ve been talking to our proprietary group and looking for a change,” Nottenbaum said. Maybes. “(MobileSentrix) is just a solid contender in terms of its pricing and economies of scale. I flew in and met them and said, ‘Hey, let’s do a deal.'”
Both companies announced this week that they have completed a deal for industry leader MobileSentrix to acquire Mobile Defenders, the industry’s second-largest wholesale parts distributor. Terms of the deal were not disclosed.
MobileSentrix will retain all 45 Mobile Defenders employees, including Notenbaum, who will remain as the company’s president.
The two companies will operate independently and will maintain their respective locations and identities.
Notenbaum said the two operations offered complementary products, with Mobile Defenders focused on developing relationships with major OEMs and MobileSentrix working directly with suppliers to offer highly competitive pricing. He added that bringing the two companies together would give them better leverage to help lower prices for the industry.
“We needed something to give back to our customers,” Nottenbaum said. “It’s hard to compete with them in terms of pricing because we don’t have the economies of scale. Now, we’ll still be competitive and do something that changes the industry.”
He said the deal also provided liquidity for two Mobile Defenders investors, including an unidentified Fortune 300 company and a family office.
Additionally, the sale did not include Mobile Defenders’ EduParts business, which has 20 employees and serves the K-12 education market. EduParts focuses on a different industry and market segment than the global business segment served by Mobile Defenders, which has been considering separating the business for some time, Notenbaum said.
According to a report by market research firm IbisWorld, the mobile phone repair industry operates in a $4 billion market in the United States alone as of 2022, with annual growth forecast of around 1 percent. Approximately 9,300 companies repair cell phones in the United States, a market served by both companies.
While the companies intend to keep their brands and websites separate in the short term, they expect to start building on each other’s strengths in the future, with Mobile Defenders providing valuable OEM relationships with the likes of Apple, Samsung, Google, Motorola, LG and Dell, HP and others to the MobileSentrix table. In addition, Mobile Defenders primarily works with enterprise customers, while MobileSentrix focuses on servicing the network of independent repair shops.
“Mobile Defenders has captive relationships with OEMs, and MobileSentrix has not had relationships with any of them,” Notenbaum said. “The goal is ultimately to integrate OEM parts and sell them through Mobile Defenders and MobileSentrix. We are also focused on, ‘Can we provide all OEM parts to all customers without any routine and requirements?’ It’s really about being the voice of the customer.”
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