Putting an end to speculation, wearables maker Fitbit, Inc. (NYSE: FIT) Friday said it agreed to be acquired by Alphabet’s (NASDAQ: GOOG) (NASDAQ: GOOGL) Google. The $7.35-per share deal values the company at $2.1 billion. The transaction is expected to close next year. Fitbit’s stock was trading up 15% following the announcement.
“Google is an ideal partner to advance our mission. With Google’s resources and global platform, Fitbit will be able to accelerate innovation in the wearables category, scale faster, and make health even more accessible to everyone,” said Fitbit CEO James Park.
After entering the wearable market more than a decade ago, Fitbit achieved steady growth riding on the popularity of its products among athletes and fitness freaks. There were reports that the company could be pursuing its sale, considering the lackluster financial performance in recent years.
The company said it will continue to protect user information and ensure that personal data is not used for Google ads. The acquisition is pending regulatory sanction and approval by the shareholders of Fitbit.
Fitbit has been losing market share to rivals including Garmin (GRMN), though the functions of their fitness devices vary. The company generates more than 40% of the revenue from its smartwatch Versa. Of late, it was under pressure to explore other options to regain market share, especially after tech giant Apple (NASDAQ: AAPL) started making inroads into the wearable market.
Fitbit is scheduled to publish its third-quarter results on November 6, after the closing bell. Analysts are looking for a loss of $0.1 per share, compared to profit last year.