Texas-based company Fossil Group has acquired wearable products manufacturer Misfits Inc. for $260 million, and the acquisition will help to position Fossil as a leader in the wearable technology industry, powered by a world-class engineering team transferred from Misfit.
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The Fossil Group is a global design, marketing, and distribution company that specializes in consumer lifestyle and fashion accessories. Its products are sold in department stores, specialty retail stores where its specialty watches and jewelries are sold across the US and in 150 countries via 26 foreign subsidiaries and a network of 75 independent distributors. It has over 600 retail stores in the US alone.
Misfit was established in 2011 by Sonny Vu together with John Sculley, former CEO of Apple and Pepsi, and Sridhar Iyengar, co-founder and former CTO of AgaMatrix.
“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.”
Through the acquision, Fossil Group is now better poised to –
- Own a technology platform with existing solutions to many technical problems in the wearables industry, including battery life.
- Scale Misfit’s technology across Fossil, Skagen, and a portfolio of 16 brands emerging in 2016.
- Expand Fossil’s market with new distribution channels, new products and brands, new enterprise partnership – which includes music, fitness, healthcare, and digital entities.
- Be a leader in the connected devices community by harnessing the strength of a powerful software and hardware engineering team led by Sonny Vu, Misfit’s founder.
“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,” revealed Sonny 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.”
Greg McKelvey, the chief strategy and digital officer of Fossil Group noted that his company treasures consumers care about the technical functionality and fashionable design of products, and that Fossil’s great design and global distribution combined with Misfit’s technology platform is what is needed to create a multi-brand wearable technology that drives fashion and technology worldwide.
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Subject to federal approval and other shutdown or merger requirements, the acquisition would go through before the end of the 2015 fiscal year. A combination of bank debt and ready cash will be used to fund the acquisition price of $260 million. Meanwhile, Sonny Vu will remain as the president and chief technology officer of connected devices for Fossil Group after the acquisition, and serve on its executive leadership team.