Action camera pioneer GoPro Inc. (NASDAQ: GPRO) has agreed to a USD$285-million merger after years of mounting financial pressure.
Starman Optical Inc. will pay GoPro shareholders USD$1.14 per share under the agreement announced Tuesday. Additionally, existing GoPro shareholders will own approximately 10 per cent of the combined company after the transaction closes.
The companies expect to complete the merger by the end of 2026, subject to shareholder and regulatory approvals. The transaction will also eliminate approximately USD$92 million of GoPro’s outstanding debt.
GoPro has struggled financially as competition and changing consumer habits weakened the once-dominant action camera maker. However, the merger could push the company beyond consumer cameras and deeper into commercial technology and defence markets.
Starman plans to combine GoPro’s imaging technology and intellectual property with its own optical and photonics operations. Photonics involves technologies that generate, control or detect light for applications including communications, imaging and computing.
Additionally, the companies plan to manufacture more products in the United States for strategically important markets. They identified artificial intelligence infrastructure, national security, cameras and advanced optical equipment as potential growth areas.
GoPro will continue supporting its existing consumer products while developing a broader range of technology. Furthermore, the companies intend to invest in new growth after strengthening GoPro’s balance sheet through the transaction.
Starman Optical has little operating history of its own. The company incorporated in Delaware on Aug. 31, shortly before announcing the GoPro transaction.
However, parent Starman Holding owns consumer technology brands including Incase, Incipio and Griffin. Its Starman New Photonics business is also developing a manufacturing facility in New Jersey.
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Declining sales forced GoPro into several rounds of layoffs
Starman Holdings CEO Charles Tebele said much of America’s important optical hardware continues to come from overseas manufacturers. Consequently, Starman sees domestic production as an opportunity as demand grows from artificial intelligence and defence applications.
The acquisition follows a steep reversal for a company that once helped define the action camera market. GoPro went public in 2014 at USD$24 per share after building a large following among athletes and outdoor enthusiasts.
Subsequently, GoPro attempted to expand beyond its core cameras with products including drones and 360-degree imaging systems. Those efforts failed to generate enough growth, and the company eventually returned its attention to higher-performance action cameras.
Meanwhile, declining sales forced GoPro to reduce its workforce through several rounds of layoffs. The company warned investors in June that it needed additional financing to remain in business.
Founder and CEO Nick Woodman provided USD$20 million in financing the following month to help stabilize the company. Additionally, YouTube creator Mark Fischbach, known as Markiplier, recently accumulated an 8.5 per cent stake in GoPro.
The merger comes as GoPro explores potential defence applications for its cameras, imaging systems and other technology. Woodman said the combined company could pursue opportunities spanning consumer products, commercial imaging, defence and artificial intelligence infrastructure.
In addition, Starman believes GoPro’s optical expertise could complement its work developing optical transceivers. These devices convert electrical signals into light and back again, allowing large quantities of data to travel rapidly through fibre-optic networks.
Such equipment has become increasingly important as artificial intelligence data centres require faster connections between servers and computing hardware. Starman also sees advanced imaging and optics as important technologies for American national security.
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