Facebook has recently announced that it will be acquiring virtual reality technology company, Oculus VR for over $2 Bn. This includes $400 Mn in cash and 23.1 Mn shares of Facebook common stock (valued at $1.6 bn based on the average closing price of the 20 trading days preceding March 21, 2014 of $69.35 per share). The agreement also provides for an additional $300 Mn earn-out in cash and stock based on the achievement of certain milestones.
Oculus is the leader in immersive virtual reality technology and has already built strong interest among developers, having received more than 75,000 orders for development kits for the company’s virtual reality headset, the Oculus Rift. Facebook plans to extend Oculus’ existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas.
“Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate,” said Facebook founder and CEO, Mark Zuckerberg.
The transaction is expected to close in the second quarter of 2014. Post acquisition, Oculus will maintain its headquarters in Irvine, CA, and will continue development of the Oculus Rift.
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