Fossil Group to acquire Misfit for $260m
November 18, 2015
Texas-based Fossil Group is buying wearable technology company Misfit for $260m. The acquisition will let Fossil Group expand its addressable market, offering consumers both traditional timepieces and fashionable connected accessories.
Misfit brings to Fossil Group a scalable cloud and app platform, a software and hardware engineering team, a native wearable technology brand, and a pipeline of innovative products.
"We have a significant opportunity to add technology and connectivity across our platform of watches and accessories," said Kosta Kartsotis, chief executive officer of Fossil Group. "With the acquisition of Misfit, Fossil Group will be uniquely positioned to lead the convergence of style and technology and to become the fashion gateway to the high-growth wearable technology and connected device markets."
Fossil Group plans to scale Misfit's technology across Fossil, Skagen and a targeted portion of its portfolio of 16 brands in 2016, ultimately accelerating the company's connected accessory roadmap. It will also expand its addressable market with new distribution channels, products, brands and enterprise partnerships, including music, fitness, healthcare and digital entities.
"We fundamentally believe consumers care about both technical functionality and fashionable design," said Greg McKelvey, chief strategy and digital officer of Fossil Group. “In fact, one without the other is simply not enough. With the acquisition of Misfit, Fossil Group will be positioned to win with the connected consumer. Our world-class design and global distribution, combined with Misfit's technology platform, creates a significantly advantaged, multi-brand and global wearable technology business poised to drive the convergence of fashion and technology."
Fossil Group expects the acquisition to close before the end of fiscal 2015, subject to customary closing conditions and regulatory approval. The purchase price of $260m, including transaction costs, will be funded through a combination of cash on hand and bank debt. Misfit founder Sonny Vu will serve as president and chief technology officer of connected devices for Fossil Group, and will be a member of the company's executive leadership team.
"We are thrilled to join forces with Fossil Group to usher in the next era of wearables where elegance, beauty and long-lasting wearability are paramount," said Vu. "Together, we will introduce products that blend Misfit's seamless, intuitive technology and user experience with the design, style and branding that is the hallmark of Fossil Group."
Fossil Group is a design, marketing and distribution company that specialises in consumer lifestyle and fashion accessories. The company's principal offerings include a line of fashion watches and jewellery sold under a portfolio of proprietary and licensed brands, handbags, small leather goods and accessories.
California-based Misfit was founded in 2011 by Sonny Vu with John Sculley, the former CEO of Apple and Pepsi, and Sridhar Iyengar, co-founder and former CTO of AgaMatrix.