Another Multi-Billion Dollar Acquisition for Facebook
March 26, 2014
Facebook (NASDAQ: FB) is acquiring Oculus VR, a virtual reality technology company, for about $2 billion. The deal includes $400 million in cash and 23.1 million shares of Facebook common stock (valued at $1.6 billion based on the average closing price of the 20 trading days preceding March 21). The agreement calls for an additional $300 million earn-out in cash and stock based on the achievement of certain milestones.
Oculus has built strong interest among developers, having received more than 75,000 orders for development kits for its virtual reality headset, the Oculus Rift. The company has raised over $93 million in funding from Andreessen Horowitz, Founders Fund, Matrix Partners and Formation 8 Partners, among others. It last secured a $75 million Series B investment (at a $287 million valuation) led by Andreessen Horowitz in December 2013.
Facebook plans to extend the company's technology beyond gaming, applying it to verticals including communications, media & entertainment and education. Oculus will maintain its headquarters in Irvine, CA and will continue development of the Oculus Rift. The transaction is expected to close in the second quarter.