Mergers and acquisitions (M&A) activity has been flying hard and fast in the mobile markets lately, with earlier reports of ZAGG (News - Alert) picking up Mophie for better than $100 million. Logitech recently made a similar deal, landing Jaybird for $50 million and potential other payouts to follow. With Jaybird's acquisition, Logitech (News - Alert) lands a new line of accessories that give it an even better market reach.
Jaybird focuses on activity trackers and Bluetooth headphones, and that made it a target for Logitech as the companies, as Logitech president and CEO Bracken Darrell put it, “...share a passion for products.” Darrell also noted that Jaybird impressed Logitech with its array of products and technology, along with its marketing savvy. All of these are good signs for Jaybird, as it's been promised access to an additional earn-out of up to $45 million based on growth targets over the next two years being achieved. The deal is subject to standard closing conditions, but is expected to be closed in a matter of weeks.
Logitech's biggest motive in buying Jaybird, based on word from Darrell, is to better focus on what he termed “...the fast-growing wireless audio wearables market.” With Jaybird, Logitech could not only put its own expertise in design and audio engineering, but also bring in Jaybird's brand loyalty and its name recognition in sports into better play.
Wearable devices are indeed a growing part of the field. Some have even wondered if these might not be the next smartphones, and sports-related wearables are making a name for themselves in the field. Immediately accessible and serving many different functions from activity tracking—how many steps, how much distance and such—to outright biometric tracking with things like heart rate and pulse tracking, there's quite a bit of room in this market, especially when other mobile functions like mapping and augmented reality come into play. Logitech, however, isn't commonly associated with such tools—the first thing I think of when thinking Logitech is keyboards and computer mice—so it needed a better way into the market. Jaybird's brand recognition may have served that purpose nicely, and made it well worth the $50-$95 million to be shelled out for it, especially if it can give Logitech an in on a growing market.
Quality hardware is just part of the battle; name recognition is also a vital point to bear in mind. That's a point Jaybird can provide, and Logitech may well have picked up the golden key it needs to get its impressive hardware lineup full access to a growing market.