News Bits: Facebook’s $2Bn Acquisition of Oculus VR Now Complete

It’s hard to overestimate the impact the news that Facebook, the social media behemoth, had agreed to acquire Oculus VR an 18 month old startup that Kickstarted virtual reality. Although it’s fair to say that there’s probably no one working for Oculus with illusions about how the news might first be greeted, I suspect more than a few were surprised at the severity and swiftness of the VR community’s reaction.

There were mock pictures of DK1’s being burned, reports emerged of DK2 pre-orders being cancelled in disgust. High profile Minecraft developer ‘Notch’ illustrated his disappointment by declaring all development for the Oculus Rift would now cease. Palmer Luckey, founder of Oculus VR also took some major flak on the subreddit /r/oculus as he explained and defended the decision to sell. It was a fairly tumultuous 48 hours.

But, as is the case with storms, it passed. The influx of VR community ‘outsiders’ took their bile elsewhere, DK2 pre-orders were quietly re-instated and a more reasoned form of debate resumed. When people put aside the knee-jerk response to everyone’s favourite Internet villain acquiring their beloved and plucky underdog and considered what this could mean for the future of virtual reality, it dawned on them that this could well be a very good thing indeed.

Meanwhile, the legal steps required to complete the process were being made. In April the US’s FCC declared the deal had passed its Anti-trust tests. Now, the California Department of Business Oversight has declared the merger fair – results of the hearing can be found here (WARNING: Legalese Alert!). This concludes the acquisition for the total and rather precise sum of $2,001,985,000 – largely made up in Facebook stock. The breakdown is reported thus:

The aggregate potential amount of consideration to be paid by Facebook in
exchange for all of Oculus VR’s outstanding stock on a fully-diluted basis 8

(the “Total Consideration”) is $460,000,000 in cash and 26,532,083
shares of Facebook Common Stock, of which $60,000,000 in cash (the
“Contingent Cash Payment Consideration”) and 3,460,706 shares of
Facebook Common Stock (the “Contingent Stock Payment
Consideration”) are payable and issuable, respectively, following the
Closing and upon the achievement of certain milestones (the “Contingent
Payment”).

For me, as someone who also ran the gamut of emotions upon reading (and writing) the news, I’m of the opinion that the merger was probably the best possible way to ensure Oculus VR’s vision of virtual reality achieves the momentum required to succeed. Subsequent statements from Oculus indicate the company can now not only focus on acquiring the best possible people but that the long awaited Oculus Rift CV1 (Consumer Version One) will be sold at near cost in order to get people onboard.

Congratulations to the Oculus VR team, I reckon Facebook landed a bargain!

Via: Techcrunch