Transaction overview
Apple acquired NextVR, a virtual reality company specializing in recording live events such as concerts and sports matches for VR experiences. The acquisition was announced on May 14, 2020, following rumors that had circulated since early April. Although the exact close date is not disclosed, Apple confirmed it bought NextVR for $100 million to enhance its virtual reality capabilities.
Deal structure and financing
Details of the equity split, debt composition, and lead banks involved in the acquisition are undisclosed by Apple. As a result, leverage metrics such as net debt-to-EBITDA or interest coverage ratios cannot be calculated from publicly available information. Since NextVR was reportedly shutting down its operations following the acquisition, it is unlikely that the seller retained any significant stake. Lock-up terms for key executives at NextVR are also not provided. There were no specific mentions of IPO optionality in relation to this deal.
Strategic context
Apple's acquisition of NextVR aligns with its broader strategic goals of expanding into virtual and augmented reality technologies. The move allows Apple to integrate advanced VR capabilities potentially within future AR/VR devices or streaming services, complementing its existing hardware development efforts. Specifically, the company is reportedly working on a pair of augmented reality glasses and headsets that could incorporate VR functionalities similar to those found in Microsoft's HoloLens or Magic Leap One devices.
For NextVR, being acquired by Apple provides an exit for the startup after raising over $115 million since its founding in 2009. The company had struggled with finding a sustainable business model as VR technology evolved and market adoption was slower than anticipated. By partnering with major sports leagues like the NBA and news organizations such as CNN, NextVR established itself in the nascent VR content space but faced challenges scaling its offerings to meet broader consumer demand.
Regulatory path
No specific regulatory review or filings were reported for this acquisition by Apple. Given the deal size of $100 million, however, antitrust scrutiny would have been unlikely unless there were concerns about significant market overlap affecting competition in a highly specialized sector like VR content creation and distribution. As both companies are based in the United States, any potential regulatory review would fall under U.S. jurisdiction with filings possibly made to the Federal Trade Commission or Department of Justice via the Hart-Scott-Rodino Act if thresholds were met.