China’s technology firm LeEco Wednesday acquired consumer electronics company Vizio for $ 2 billion. Under this agreement Vizio hardware and software businesses will be owned and operated as a wholly owned subsidiary of LeEco, while the data business, Inscape, will spin out and operate as a separate, privately owned company.
“LeEco believes in breakthrough technologies, a complete ecosystem and disruptive pricing. Acquiring Vizio is an important step in our globalization strategy and building our North American presence,” said Yueting Jia, Founder, Chairman and Chief Executive Officer, LeEco.
The transaction is expected to close during the fourth quarter of 2016, LeEco said in a statement.
Vizio is based out of Irvine, California and is a leading consumer electronics brand in North America, with products like smart televisions, connected home entertainment systems and other high-end consumer electronics products.
The acquisition benefits both companies with Vizio offering LeEco a steady install base of users and a brand that is both popular and successfully distributed throughout major North American retail channels. On the other hand LeEco provides Vizio immediate global scale to bring its innovations to consumers worldwide.
“Fourteen years ago, I mortgaged my house to start Vizio and since then, it has grown into one of the most well-known and respected CE brands in North America. As an entrepreneur, I couldn’t be more proud of what has been accomplished,” said William Wang, Founder, Chairman and Chief Executive Officer, Vizio.
“As we enter a new chapter with LeEco, I’m humbled by the hard work and dedication of Vizio shareholders and employees. Their unwavering faith in the brand and commitment to excellence is what made this venture possible. I’m excited to see how LeEco’s global reach and resources will elevate Vizio as we continue to bring great technology, innovation and value to our consumers.”
The Vizio executive management team will remain in place and will continue its operations as an independent subsidiary from its existing headquarters in Irvine, CA. The Vizio brand and its portfolio of products will continue to be sold through its existing distribution channels and supported by the same North American-based, award-winning customer service. William Wang will transition to Chairman and Chief Executive Officer of Inscape, with focus on the continued expansion and growth of the brand’s data business.
BofA Merrill Lynch acted as advisor to the special committee of the Vizio board of directors, and Latham & Watkins LLP served as legal counsel for Vizio on this transaction.