Logitech International SA (USA) (NASDAQ: LOGI) has moved to boost the variety of devices in its portfolio with the acquisition of Blue Microphones. The company has reached a $117 million agreement for the purchase of the hardware maker behind popular broadcasting microphones Yeti and Snowball.
The acquisition should strengthen the company’s prospects in the audio space where it already operates speakers and gaming headsets. With the acquisition, Logitech has essentially added an important dimension that should help it be a key player in a rapidly expanding space.
Blue offers high-end products for music producers. However, in the recent past, the company has sought to expand its footprint in the gaming space with the development of microphones and gaming bundles. The company’s products range from $60 to over $4,000.
“Logitech’s acquisition of Blue Microphones will accelerate our entry into a growing market and offers another way for us to help bring people’s passions to life. Joining with Blue is an adjacent opportunity for us – a new way to grow – with additional synergies related to our existing gaming, PC webcam and audio categories,” said CEO Bracken Darrell.
Stellar Q1 Results
The acquisition of Blue comes just days after Logitech announced impressive first quarter financial results. The company reported earnings per share of $0.34 beating analysts’ estimates of $0.28 a share. Revenue, on the other hand, came in at $608 million versus a consensus estimate of $586.73 million.
Buoyed by the first quarter financial results the company has consequently raised its fiscal 2019 outlook. Logitech expects its sales to increase by between 9 and 11%, up from the previous outlook of high single-digit sales growth. The company expects its non-GAAP operating income outlook to range between $325 million and $335 million, up from initial guidance of between $310 million and $320 million.
Logitech attributes the stellar Q1 financial results to the diversity of its portfolio and strength of innovation. The company’s revenue streams should receive a boost going forward in the wake of Blue’s acquisition.
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Author does not have investment in stock discussed in this article.