Fossil scoops up Misfit for $260 million

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The wearables market is very competitive, causing mergers and acquisitions (or partnerships, at least) to be the best route for many companies. Tonight, Fossil announced that it will be acquiring Misfit for a whopping $260 million. The apparel designer sees Misfit as an opportunity to expand its presence in connected devices.

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Products launched by Misfit in 2015 include in the Flash Link, Speedo Shine, and Shine 2. Aside from activity trackers, Misfit also develops a smart bulb and a sleep tracker. Fossil’s backing should allow the company to go deeper into areas like home automation while remaining committed to wearables.

Fossil was specific in naming what is gained from Misfit joining its operations:

  • 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.

The company recently announced the Q smartwatch and a Q line of wearables; however, the Misfit brand is likely going to handle things moving forward.

Sonny Vu will continue leading connected devices, with Fossil naming him President and Chief Technology Officer. Vu said that Misfit’s expertise in technology and user experience will be easily blended with Fossil’s signature style and branding. Of course, any press release makes it look like things will be perfect for a lifetime. So let’s see where Misfit stands after six or twelves months of Fossil ownership.

Source: Misfit

Fossil Group, Inc. to Acquire Wearable Technology Innovator Misfit

Acquisition of Leading Technology Platform and World-Class Engineering Team Will Fuel Rapid Growth in Wearable Technology

RICHARDSON, Texas, Nov. 12, 2015 (GLOBE NEWSWIRE) — Fossil Group, Inc. (NASDAQ:FOSL) today announced that it has entered into a definitive agreement to acquire Misfit, Inc., an innovator in wearable technology and stylish connected devices. The acquisition will enable Fossil Group to 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 world-class 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.”  

The acquisition will enable Fossil Group 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.” 

Transaction Details

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 $260 million, including transaction costs, will be funded through a combination of cash on hand and bank debt.

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.

See related press release titled, “Fossil Group, Inc. Reports Third Quarter Fiscal 2015 Results” for additional details regarding the acquisition.

About Fossil Group, Inc.

Fossil Group, Inc. 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 jewelry 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 jewelry stores in the U.S. 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 U.S. e-commerce website at www.fossil.com. Certain press release and SEC filing information concerning the Company is also available at www.fossilgroup.com.

About Misfit

Misfit invents and manufactures connected wearable products sold around the world at various retailers and on www.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.


About the Author: Justin Herrick

Born and raised in New Jersey, Justin is a graduate of Fairleigh Dickinson University where he studied marketing with a focus on digital marketing. He's very talkative and enjoys discussing anything from technology and sports to video games and television. As for Justin's current device rotation, he carries around the Google Pixel and Nexus 9. In the rare case that his phone or tablet is not in his hand, he is either flicking through cards on his Moto 360 (2015) or typing away on the Microsoft Surface Book. Justin is patiently waiting for the day that Google replicates the Galaxy Nexus with modern day specifications.