Logitech has announced that it is acquiring Astro Gaming for a whopping $85 million in cash. After the acquisition, Astro will be integrated into Logitech’s PC gaming sub-brand Logitech G.
How Astro could help Logitech
Logitech has been serving PC gamers with peripherals like mice and keyboards for a long time. Astro, on the other hand, has been offering its products to console gamers, so Logitech hopes the acquisition will enable it to penetrate further into the gaming accessory industry.
In a blog post, Logitech’s gaming head Ujesh Desai noted that Astro will focus on making products for consoles, whereas Logitech G will focus on PC gaming products like before. Astro and Logitech are going to remain separate brands and will have two separate teams, although both will report to Desai. He believes that Astro and Logitech will create the perfect synergy to compliment Logitech G’s focus on PC gaming.
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“We love the team, the brand, and the products. Together, we want to make game play even more fun for gamers everywhere,” the executive said.
Astro has been popular for its smart technology that went into wired and wireless headsets Thus, its products have been a favorite of console gamers. The Astro A50 is one example of the excellence the company has achieved when it comes to sound and comfortable headsets. However, it costs over $200. Last month, the company also came up with a budget-level A10 headset, which sells for $60.
Astro Gaming VP Aron Drayer told CNET, “Certainly there is a desire to do more; we don’t see ourselves as an audio company by any means. We think of ourselves as a gaming company making the best gaming products for people.”
Further, the executive stated that there are a lot of things the company would like to do for its users to make their experiences better.
Using acquisitions to grow
Logitech’s recent acquisition is justified by all means, given that rival Razer purchased THX in October 2016 and phone maker Nextbit to expand beyond a peripheral company. The acquisition will reportedly be complete by August, and it could be a minor dent to Logitech’s bottom line as it looks to integrate and expand Astro’s business internationally.
“In FY 2018, we expect the acquisition of Astro to add approximately two points of growth to the top line, and to be slightly dilutive to the bottom line in the first year, as we integrate the business and invest to expand Astro internationally,” Desai said.
Logitech has made other acquisitions in the past to expand its portfolio. For instance, it has been performing well in Bluetooth speakers since it acquired Ultimate Ears for $34 million in 2008 and took over wireless earbud maker Jaybird for $50 million in April. The company also acquired flight stick maker Saitek in 2016.
Astro Gaming has been acquired more than once, first by Skullcandy, which acquired the Astro Studios spinoff in 2011. Then Mill Road Capital acquired Skullcandy in 2016, notes CNET.