Fitbit is being acquired by Google's parent company Alphabet for about $2.1 billion, who are wading into the crowded and competitive field of wearables and fitness technology.
Fitbit is a pioneer in wearable technology, but it has been shredded by competition recently. The company's market capitalisation soared to just under $10 billion after becoming a public company in 2015. Its value this week is well below $2 billion.
When rumors of a potential buyout by Google surfaced earlier this week, Fitbit shares soared almost 30%. The stock jumped another 17% at the opening bell Friday.
Alphabet said it will pay $7.35 per share for the company, which were trading at $7.20 each after the deal was announced.
"With Google's resources and global platform, Fitbit will be able to accelerate innovation in the wearables category, scale faster, and make health even more accessible to everyone," Fitbit co-founder and CEO James Park said in a statement.
Fitbit has 28 million active users worldwide and has sold more than 100 million devices.
The company said that its privacy and security guidelines won't change and that it will continue to be transparent about the data it collects and why. Fitbit said that it never sells personal information and that its health and wellness data will not be used for Google ads.
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The deal is expected to close next year if approved by regulators and Fitbit shareholders.
A survey by research firm IDC for the second quarter of 2019 found Fitbit in the fourth place in the wearables and fitness technology market, which is led by China's Xiaomi. Apple, which makes the leading smartwatch, follows while Chinese-based Huawei is currently in the third place.