Watchmaker Fossil Group Inc. is expanding on their current smart wearables offering with the announcement that they will be acquiring wearable fitness tracker startup Misfit Inc. for $260 million.

Fossil Group has a 16-brand selection, including their namesake and Skagen. They also make watches for a variety of designer labels including Kate Spade, Michael Kors and Tory Burch. In 2016, the Fossil Group plan to scale Misfit’s technology across both Fossil and Skagen, as well as a targeted portion of its 16 brands (PDF).

“We have a significant opportunity to add technology and connectivity across our platform of watches and accessories,” said Kosta Kartsotis, CEO of Fossil Group. “With the acquisition of Misfit, Fossil Group will be uniquely positioned to lead the convergence of style and technology and to become the fashion gateway to the high-growth wearable technology and connected device markets.”

Since launching in 2011, Misfit has raised approximately $63 million in three funding rounds. Investors include Xiaomi, GGV Capital, JD.com, Horizons Ventures, as well as Founders Fund, Khosla Ventures and Norwest Venture Partners. Fossil Group will give employment offers to all of Misfit’s 220 employees, spread across California, Ho Chi Minh City, Shenzhen and Beijing.

This is not the first time that the Fossil Group has explored the smart wearables world, but the Misfit acquisition is definitely a much bigger leap. In October, they launched the Fossil Q range (pictured above) consisting of the Q Grant, Q Founder and two smart bracelets, the Q Reveler and Q Dreamer.

It was also in October that Misfit launched the next generation of their fitness tracker, with the Shine 2. However, being a stand-alone brand in the ever-expanding smart wearables market is getting more and more difficult. “By rolling into Fossil, the startup’s technology will be able to take advantage of Fossil’s lineup of brands, as well as its massive distribution and manufacturing capability,” Misfit’s CEO and co-founder Sonny Vu told The Wall Street Journal.

Once the acquisition transaction closes, Vu will become the president and chief technology officer of connected devices for Fossil Group.

The acquisition deal is expected to close before the end of fiscal 2015. Funding of the $260 million purchase price, including transaction costs, will be a combination of cash on hand and bank debt.

Fossil sells 50 million watches and accessories across 150 countries annually, but the first half of the year has seen rather flat volume shipments. The acquisition of Misfit could be a much-needed boost for the company.\

Screenshot: SiliconANGLE via Fossil