Facebook makes another billion-dollar acquisition, this time for Oculus VR, Inc. The world’s most popular social networking site made the announcement on Tuesday, revealing details about the definitive agreement just reached with the leader in immersive virtual reality technology.
The deal is worth an estimated $2 billion. $400 million of it is cash. 23.1 million shares of Facebook stock are also included as part of the deal. The common stock has an estimated value of $1.6 billion, based on recent closing prices in March preceding the agreement. In addition, the plan details another $300 million for cash and stock earned out by meeting certain milestones.
Oculus already has a large following. There are currently 75,000 standing orders for the Oculus Rift, the company’s virtual reality headset, still in the development kit stage. Other industries are experimenting right now with virtual reality technology and new ways to make it relevant for the future of technology. Facebook has plans to use Oculus’ strong showing in gaming and take it to new dimensions, including entertainment, media and education, among other possible uses. This could position virtual reality technology as one of the top leaders when it comes to innovating new and upcoming communications and social platforms.
Facebook founder and CEO, Mark Zuckerberg, said in a prepared statement, “Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow.” Zuckerberg went on to say, “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”
In response, Oculus VR co-founder and CEO, Brendan Iribe, said “We believe virtual reality will be heavily defined by social experiences that connect people in magical, new ways. It is a transformative and disruptive technology, that enables the world to experience the impossible, and it’s only just the beginning.”
As part of the agreement, Oculus will keep its company based in Irvine, California. Development of the Oculus Rift will also continue. The two companies should finalize the deal in late spring, likely the second quarter of 2014.