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The wristwatch maker Fossil Group has agreed to buy the fitness wearables company Misfit for $260 million.

The news was formally announced by Fossil Thursday afternoon (pdf). Fossil said the $260 million price tag will be covered by a combination of “cash on hand and bank debt.”

Misfit has been making minimalistic, low-cost, aluminum and plastic fitness trackers since 2011. Its flagship product is an aluminum model called the Shine.

Fossil said it wants to “scale Misfit’s technology across Fossil, Skagen and a targeted portion of its portfolio of 16 brands in 2016.” Misfit’s chief executive, Sonny Vu, will become the chief technology officer of connected devices at Fossil Group.

Fossil Group currently makes watches for “mall” brands, like Adidas, Burberry, and DKNY. The group wants to leverage Misfit’s hardware tech, and its data platform. However, the Misfit line of fitness trackers will live on under the existing brand name.

“With the acquisition of Misfit, Fossil Group will be positioned to win with the connected consumer,” said Fossil chief digital officer, Greg McKelvey. “Our world-class design and global distribution, combined with Misfit’s technology platform, creates a significantly advantaged, multi‐brand and global wearable technology business poised to drive the convergence of fashion and technology.”

Fossil Group teamed up with Intel to create a trio of smartwatches last year, and announced at the August Intel Developer Forum that the products would soon be coming to market.

Just last month, Misfit announced the second version of its popular Shine fitness and sleep tracker, the Shine 2, which improved on the original Shine by adding a new 3-axis magnetometer to the 3-axis accelerometer inside the device.

In September 2014, the company released the “Flash,” a lower-priced version of its flagship Shine health wearable. The new device has the same shape and functionality as the Shine but is housed in a “durable soft touch plastic” instead of the Shine’s anodized aluminum. The lower price of the plastic allows the Flash to sell for $50, versus the Shine’s $100 price tag.

Fossil said it expects the acquisition to close before the end of fiscal 2015, subject to customary closing conditions and regulatory approval.

Correction: A previous version of this story identified Sonny Vu as the “chief technology officer” of Fossil. In fact, his title is “chief technology officer of connected devices.” We regret the error. 

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