Major lifestyle and fashion company, Fossil Group, has entered into a definitive agreement to acquire Misfit, an innovator in wearable technology and developer of the Shine activity tracker. The acquisition will enable Fossil Group to expand its ‘addressable market’, offering consumers both traditional timepieces and fashionable connected accessories.
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 US$260 million, including transaction costs, will be funded through a combination of cash on hand and bank debt.
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.”
A release from Fossil Group notes that the acquisition will enable it to:
- Own a technology platform that has already solved many of the hardest problems in wearables, including battery life.
- 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.
- Expand its addressable market with new distribution channels, new products, new brands and new enterprise partnerships, including music, fitness, healthcare and digital entities.
- Lead in the connected devices space by harnessing the power of a world-class software and hardware engineering team spearheaded by Misfit founder, Sonny Vu.
“We fundamentally believe consumers care about both technical functionality and fashionable design. 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,” said Greg McKelvey, Chief Strategy and Digital Officer of Fossil Group.
“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.”
“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 Sonny Vu, founder and Chief Executive Officer of Misfit.
“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.”
Sonny Vu will serve as president and chief technology officer of connected devices for Fossil Group, Inc., and will be a member of the company’s executive leadership team.
Fossil Group is a global design, marketing and distribution company that specializes in consumer lifestyle and fashion accessories. The company’s principal offerings include an extensive line of men’s and women’s fashion watches and jewellery sold under a diverse portfolio of proprietary and licensed brands, handbags, small leather goods and accessories.
The company’s products are sold to department stores, specialty retail stores and specialty watch and jewellery stores in the US and in approximately 150 countries worldwide through 26 company-owned foreign sales subsidiaries and a network of approximately 75 independent distributors.
The company also distributes its products in over 600 company-owned and operated retail stores, through its international e-commerce websites and through the company’s US e-commerce website at fossil.com.
Misfit invents and manufactures connected wearable products sold around the world at various retailers and on misfit.com. The company 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.