Fitbit (NYSE: FIT) is apparently opening its wallet for a fresh acquisition. Tech industry news website The Information reported, citing “three people briefed on the deal,” that the fitness band leader is nearing a deal to buy privately held smartwatch manufacturer Pebble. Building on The Information’s article, TechCruch reports that “a source close to the company” said the potential price is between $34 million and $40 million.
Neither Fitbit nor Pebble has yet commented on the speculation.
According to yet another article on the situation from The Wall Street Journal, “a person familiar with the matter” said that Fitbit’s interest lies in acquiring the operating system for Pebble’s watches. The Pebble products would subsequently be discontinued.
Pebble, which started raising funds through Kickstarter for its products in 2012, has around a 3% share of the smartwatch market, according to data from IDC. Despite that small presence, it has a dedicated fan base that favors the company’s offerings, which are lighter, more basic, and have longer battery lives than their rivals’ more cutting-edge wearables.
Yet the company is apparently struggling. According to the Journal‘s source, it has had financial difficulties and has laid off employees. The TechCruch story said that the potential purchase price is “barely covering [Pebble’s] debts.”
This isn’t the first acquisition of the year for Fitbit. In May, it purchased the wearable-payments assets of consumer electronics company Coin for an undisclosed amount.
There is some urgency for Fitbit to add to its top line. Revenue growth is a concern, with the crucial holiday quarter expected to show growth of only 2% to 5% on the top line. Meanwhile, although the company’s products are popular, they compete against those of large, hungry rivals such as Under Armour and Nike that have made progress recently in the wearables segment.
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