KAYS parent company Great Universal Stores has spent £37m on an internet software company so it can branch out into multi-media computer sales.

The deal, which puts all the issued share capital of jungle.com under GUS ownership, is expected to be completed by the end of the week.

The £37m cash transaction includes around £12m of debt, bosses said today.

Jungle.com has developed a leading position selling PCs, computer peripherals and software as well as console and computer games, music and videos through its web sites, catalogues and telesales operation.

It is one of the top five most visited internet retail sites in Britain, second only to Amazon.

Sales in the year to July were posted at £75m.

Losses before tax, after a full write-off of £2m of technological developments and £5m of launch marketing costs, were £11.4m.

Steve Bennett, founder and chief executive of jungle.com has signed a four-year contract and will report to Terry Duddy, chief executive of GUS subsidiary Argos Retail Group.

Other senior management are committed to staying with jungle.com for a minimum two-year period.

John Peace, GUS chief executive, said the acquisition would bring GUS' annual sales up to £50m.

He predicted rocketing spending on computer hard and software through the internet and other channels.

And said the deal would give Argos a wider product range in the home office market, including furniture, storage and accessories.

"There is a strong strategic fit between these two businesses," Mr Peace added.

"For the first time, GUS will be able to offer its customers a wide range of computer and office products via the most convenient channel - store, catalogue or internet - for delivery to store, home or work.

"With this acquisition, GUS is establishing itself as a leading e-commerce retailer with annual sales of well over £50m."

Mr Bennett, of jungle.com, said GUS would provide the "muscle" to push the company into its next stage of growth.

"Of the many offers we received, GUS was by far the best fit," he said.

"With its experience in personal finance and home delivery and the opportunity to add its products to the jungle.com mix, we have a great platform for growth."