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Tuesday, April 30, 2013

Jawbone Buys Sensor Start-Up for $110 Million

On Tuesday, Jawbone, which makes wireless headsets and music accessories, announced that it acquired BodyMedia, a company that sells wearable sensors, for about $110 million.

Jawbone declined to comment on how much it paid for the acquisition, but a source close to the deal who was not authorized to speak on the record confirmed the price.

“It’s a significant deal because it’s a significant opportunity,” said Hosain Rahman, the chief executive of Jawbone. “We looked at the market and what we thought about what we can do on our own or together with BodyMedia, and we found a deal acceptable to our shareholders.”

BodyMedia has been making and selling activity tracking armbands that can monitor exercise and sleep behaviors since 1999. Mr. Rahman said he was most interested in the company’s expertise, and its robust trove of data about how people use and interact with their body monitors and sensors. His plan is to continue to run and sell BodyMedia products and incorporate Jawbone’s line of wearable products into BodyMedia’s software services that let people view and monitor their activity.

In addition, Mr. Rahman said he was interested in BodyMedia’s portfolio of patents, which he thinks will help future-proof the company as more companies get into developing and marketing their own wearable designs.

“When you are a creator or inventor, you have to make sure you are protected and make sure your innovation is solid and protected,” he said.

Currently, Jawbone sells the Up, a wearable fitness bracelet, but the device has had some stumbles in the market, making its debut to some unfavorable reviews and critical reactions to the app that is meant to be used with the wristband.

But Mr. Rahman says the Up has been the company’s fastest-selling product, although he declined to share specifics on sales, further bolstering the company’s bet in the new hardware category.

“We now have the definitive intellectual property for the next phases of wearable tech,” he said.