Skullcandy, a company known for its gaming and music headphones, is looking to once again go private. After it went public in 2011 through an IPO, the prices of its stock have plummeted due to a slowdown in the growth of its revenue.
To further this goal, Skullcandy has agreed to a purchase offer by Incipio, a company also in the smartphone accessory business but focuses on cases and other protective add-ons.
Under the terms of the definitive merger agreement signed between both parties, Incipio will pay $5.75 per share in cash, which translates to a purchase price of about $177 million.
The offer represents about 29 percent premium over the closing share price of Skullcandy on June 22, and is about 49 percent premium over the 90-day volume-weighted average of the company's share price.
In addition to the headphones business of Skullcandy, the agreement will also allow Incipio to acquire Astro Gaming, which is the company's secondary brand focused on headphones and headsets tailored for gamers.
Skullcandy headphones can be purchased through a wide variety of channels, including Target and Best Buy retail stores all over the United States. For a purchase price of $177 million, Incipio will gain Skullcandy's wide reach in retail, which will make the acquisition a good deal for the case maker.
Skullcandy's products are youth-focused and flashy, with reception on the company's headphones nothing more than middling. In the company's early years, the focus had been on extreme color combinations and faux military patterns, but it has since been aiming to position itself as a low-cost alternative to more expensive brands such as Sennheiser and Bose. Included in the company's product lineup are colorful earbuds, sweat-proof headsets and Bluetooth headphones with noise-canceling features.
Skullcandy has not performed as well as it had hoped though, with the stronger dollar affecting the sales of the company outside of the United States.
Incipio is seen as a good fit as the buyer for Skullcandy, as the company will be able to lend its expertise in fashion and technology accessories to the headphones maker for an expanded line of products geared towards tech and gaming customers.
However, the purchase agreement is not yet final. Skullcandy will have one month to shop the offer made by Incipio to see if there will be another company that will offer more to acquire the company.
