Fossil to acquire wearable tech maker Misfit for $260m

Watchmaker Fossil yesterday agreed to buy wearable tech company Misfit for $260m as it expands into the smartwatch and wearables space.

Fossil will continue to produce Misfit health trackers, while incorporating Misfit's technology into its watches.

Fossil says the acquisition will allow it to "scale Misfit's technology across Fossil" while giving Misfit new distribution channels and boosting its R&D. 

Misfit, best known for its Shine fitness tracker, specialises in attractive wearables and offers cloud-based health tracking.

Texas-based Fossil Group owns the Fossil and Skagen brands, and licenses other high-end watch brands, including Michael Kors, Diesel and DKNY.

Although it's over 30 years old, Fossil proved it was no dinosaur last month when it launched its own Android Wear smartwatch, just a week after Misfit celebrated its fourth birthday. 

Greg McKelvey, chief strategy and digital officer of Fossil Group, said: "With the acquisition of Misfit, Fossil Group will be positioned to win with the connected consumer." 

While Sonny Vu, chief executive and co-founder of Misfit, said: “If you don’t have a brand it's hard to be legit in this space.” 

Vu is expected to take on the role of president of connected devices for Fossil Group after the deal closes which is expected to be at the end of this year. The acquisition will be funded with a mix of cash on hand and bank debt.

Shares in Fossil have fallen over the last year. Yesterday, the Nasdaq showed they were down to $51 at close of trading, a sharp fall from this time last year when they were worth $109.8 – more than double their present value.