Google’s Nest Labs acquires video-monitoring device maker Dropcam
An acquisition can help a company strengthen its portfolio, and that is what is taking place with Google's Nest Labs' acquisition of Dropcam, a manufacturer of video-monitoring devices.
Earlier this year, Google acquired Nest Labs, a company that creates automated home products like smoke detectors and thermostats. Nest Labs was acquired by Google for $3.2 billion.
Dropcam makes Wi-Fi video monitoring devices that are based in the cloud. The technology features capabilities like two-way talk, remote viewing and live streaming. It also enables users to maintain archived footage on Dropcam's servers for a monthly fee.
The article highlights data from Gartner that predicts that the number of devices that are connected to the Internet (the Internet of Things) will be 26 billion by the year 2020. It makes sense that Google would want to acquire technology that will expand its capabilities in this growing area.
Dropcam says in a blog post on its website that the match between Nest and Dropcam is a "natural fit" that will help the company fully realize its vision. In many circumstances, companies join together in a merger or acquisition to extend their capabilities beyond what they would have been able to achieve alone.
While this acquisition has raised concerns from privacy advocates, it makes sense for a company like Google that is working to make its products increasingly connected. Tech Crunch reports that Google/Nest are buying Dropcam for $555 million in cash.
Companies looking to expand their portfolio offerings may seek to acquire technology that complements what they currently have. An M&A advisor can help develop an acquisition strategy that will work for your business.