Internet and electronics group LeEco agreed yesterday to acquire US-based flat screen television producer Vizio in a $2bn deal that will give exits to contract manufacturers AmTran Technology and Foxconn.
Founded in 2002, Vizio develops consumer electronics products such as smart televisions and sound bars which are then assembled in China to be sold at relatively low cost.
The deal will help China-headquartered LeEco build out its business in the US, and its resources will enable Vizio’s products to be distributed globally.
LeEco plans to continue operating the company’s hardware and software businesses as a wholly owned subsidiary and to spin put Inscape, Vizio’s data business, as a separate company that will be 51% owned by Vizio co-founder and CEO William Wang and 49% by LeEco.
Vizio filed in July 2015 to raise $172.5m in an initial public offering but had not filed any update on the process since October.
The company has not disclosed details of equity funding but AmTran and Foxconn, both of which are also manufacturing partners, owned stakes in Vizio sized at 20.4% and 8.3% respectively, according to the IPO filing, with Foxconn’s share held by subsidiary Q-Run Holdings.
Investment vehicle V-TW Holdings holds a 7.7% stake, but Vizio’s largest shareholder is William Wang, who owns 54.4%.
YT Jia, LeEco’s founder, chairman and CEO, said: “LeEco believes in breakthrough technologies, a complete ecosystem and disruptive pricing. Acquiring Vizio is an important step in our globalisation strategy and building our North American presence.
“From its inception, Vizio introduced a disruptive business model that changed the industry and aligns with our vision of breaking boundaries to deliver consumer-focused products, software and services.”
BofA Merrill Lynch was advisor to Vizio’s board of directors for the deal, while Latham & Watkins was legal counsel.